In an affidavit scrutinized by a bench of five judges who seized a series of 2016 defiance lawsuits cancel monetization decision, the government said, “There has been a large increase in circulation of Rs 500 and Rs 1,000 banknotes compared to Rs 50 and Rs 100 in the previous five years, according to RBI data.”
“This shows a sharp increase in the top two denominations, which is 76.4% for Rs 500 and 109% for Rs 1,000 from 2010-11 to 2015-16. The additional feature is also Central. and RBI considered introducing a new series of banknotes that could solve the problem of black money, counterfeit money and illegal financing by simultaneously legally withdrawing Rs 500 and Rs 1,000 denominations,” it said. .
The government says India has a workforce of 481 million according to the 2011 census, of which an estimated 400 million are employed in the unorganized sector. In addition, informal employment in India accounts for a much higher proportion of off-farm employment than in most other economies. The report said that transparency is one of the steps to expand the formal sector and shrink the informal sector.
Policy push to include digitization of transactions: Government cancels monetization
In affidavits before the Supreme Court on the decision to de-monetize in 2016, the Center said: “The withdrawal of these legal tenders is one of the important steps in strengthening the official economy with the aim of expanding opportunities for millions of people living on the periphery of the economy.”
“Policy push includes digitizing transactions, connecting and deploying technology to enable last-mile access, increase tax base, enhance tax compliance, reduce costs of doing business, eliminate variables form of policy, facilitating financial inclusion at the formal and labor sector levels and agricultural reform,” it said.
The center said that the number of counterfeit coins and their value has decreased significantly due to the de-monetization process and the volume of digital payments has increased from 1 trillion transactions worth Rs 6.592 billion in 2016 to more than 730 billion transactions worth more than Rs 12 trillion in 2016. a single month of October 2022.
“In summary, the withdrawal of the Rs 500 and Rs 1000 bills is in itself an effective measure and also part of a larger strategy to combat the threat of black money, counterfeit money, terrorism and terrorism. claims to finance tax evasion, but is not limited to any of them alone. It is an economic policy decision made under the powers conferred under the RBI Act of 1934,” it said.
Given that this is a well-thought-out decision, the Center said the decision was made after extensive consultation with the RBI and prior preparation. “Preparation included finalizing new designs, developing security inks and prints for new designs, changing printer specifications, and supplying inventory with RBI branches in multiple locations. places across the country,” it said.
Without asking SC about the measures taken to alleviate short-term difficulties for people in 2016, the Center listed the steps taken in 2016 to ease people’s difficulties.
