1. In big demonetisation blow to Narendra Modi government, almost all Rs 500, Rs 1000 notes deposited in banks

In big demonetisation blow to Narendra Modi government, almost all Rs 500, Rs 1000 notes deposited in banks

Indians have deposited nearly all the currency bills outlawed at the end of the deadline last year, according to people with knowledge of the matter, dealing a blow to PM Modi’s drive to unearth unaccounted wealth and fight corruption.

By: | Updated: January 5, 2017 3:21 PM
Prime Minister, Narendra Modi, black money, Pradhan Mantri Garib Kalyan Deposit Scheme, Income Tax Department, PMGK, RBI Banks have received R14.97 lakh crore as of December 30. (PTI)

Indians have deposited nearly all the currency bills outlawed at the end of the deadline last year, according to people with knowledge of the matter, dealing a blow to Prime Minister Narendra Modi’s drive to unearth unaccounted wealth and fight corruption, reports Bloomberg.

Banks have received R14.97 lakh crore as of December 30, the deadline for handing in the old bank notes, the people said, asking not to be identified citing rules for speaking with the media. The government had initially estimated about R5 lakh crore of the R15.4 lakh crore rendered worthless by the sudden move on November 8 to remain undeclared as it may have escaped the tax net illegally.

A full validation of the banknotes is a setback for Modi who had been relying on this move to burnish his administration’s corruption fighting credentials and boost its popularity ahead of key state elections. The anti-corruption measure has dented economic growth and forced millions into lengthy bank queues, though it remains broadly popular.

“The prime minister had been ill advised and the government was not prepared to handle the situation,” said Nilakantha Rath, honorary fellow at the Indian School of Political Economy. “The government expectation has been belied.”

Private indicators published over the past week signal that the $2-trillion economy will be hurt by the cash clampdown, raising fears that a continued slowdown will strip India of its position as one of the world’s fastest-growing major economies.

Banks have disbursed about Rs 8 lakh crore in new currency bills, the people with knowledge of the matter said. The figures of banknotes deposited are provisional and may change, they added. Finance ministry’s spokesman DS Malik didn’t respond to a call and a message sent to his mobile phone.

Although Modi’s credibility has been dented, the jury is out on the long-term economic and political fallout. So far his public support remains strong, with some standing in lines waiting to access cash still voicing their approval of his decision to target unaccounted wealth.

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  1. A
    Jan 5, 2017 at 9:41 pm
    Leapp before you look? Mr. Modi explained and did simple thing in most complex way hurting many of us.. usually dishonest crooks do this for personal gains but PM Modi did this to get te corrupts but many of us paid heavy price.
    1. R
      Jan 5, 2017 at 5:14 am
      This is good, idle money back in banking system and Thia is good for economy
      1. B
        Jan 5, 2017 at 3:31 am
        A lot of these deposits will come under IT scrutiny. Not just a matter of detail. There will be a lot of unexplained deposits not only with commercial banks as well as coop banks. The quany of gold confiscated is not all that small. Dozens of corrupt senior officials have been exposed. The role of money in the elections will be far less, as our corrupt people will need a lot more flow to save more black money. Government action is neither demonetisation nor remonetisation. It had far more implications than we ume. Nor was the inconvenience so bad. It was worsened because our mone crooks hired people on a large scale to convert their cash in the banks elbowing out legitimate clientsfrom the queues. There is a lot of economic activity one sees. The next harvest will be good. And the growth which the pundits are harping on will not be dented not more than 1 %. The predictions of pundits have generally been worse than those of astrologers and the astrologers are bad enough!
        1. Sundar BN
          Jan 5, 2017 at 3:07 am
          Wrong !Wrong !!Wwwrronnnggg !!!{In the best aping of Trump}They did NOT all comeback !Nosirreebob !Go check the notes and if you're clever enough, you'll find that they're all mostly Made in stan .....NaMo jeet a !Masha Allah !
          1. Sundar BN
            Jan 5, 2017 at 2:57 am
            chAnd hOtA hai chAnd sE sitArOn sE nahin |brave moves hOtA hai NaMo sE RaGa sE nahin ||wAh wAh ! wAh wAh !!
            1. T
              Thippanna M.S.
              Jan 6, 2017 at 2:06 am
              It is too early to experience repercussions. Government should come out with the detailed statistics of demonetisation then the real picture will emerge.
              1. C
                Jan 5, 2017 at 6:33 am
                this is good
                1. D
                  Dev Chandra
                  Jan 5, 2017 at 11:47 am
                  This news seems to be like gossip. There is no valid comments and figures given by any authentic source. Fake news . Reported by anti Modi. Lobby. Just political gossips. Against Honest P.M. we have ever seen.
                  1. V
                    vikash Kumar
                    Jan 5, 2017 at 2:48 am
                    Its a big blow, but is it a failure? only time will say. If it helps to widen Tax net, proper implementation of GST, revival of Bank's deposits & interest , porising alternate mode of payment etc these by products itself a huge boost for economy.
                    1. Kara Mirch
                      Jan 5, 2017 at 12:55 pm
                      Yes, they should have taken your advice before doing anything as the people at the helm of government are duds! IT department has been doing raids for 70 years but black money has grown multiple folds. Why? Raids are not the full solution. It is big data whereby every Tom, and Harry in the country and their activities are brought under the IT scanner. Millions are now operating outside the purview. They have billions stored away which goes around in the parallel economy. Only way is to demonetise which makes them useless. However, those individuals are resourceful to continue their black money ways and get new notes. This is where the deposit system kicks it as it then records all those who have put money in the bank themselves or through benamis or false accounts. The IT department and DRI now have access to that information which they would analyse and nail the culprits. Once in the database, they can never escape and will be audited every year. So, don't think that people who do these on behalf are the government are fools.
                      1. K
                        Jan 5, 2017 at 12:43 pm
                        Just because all the Rs500 & Rs1000 notes were deposited in the banks doesn't mean these notes cannot be dishonoured by the government if the account holders cannot substantiate the source of the funds when questioned by the IT department. By actually depositing the notes in their accounts on behalf of others, account holders are now the route to grabbing the people who actually supplied them. By interrogating them and the bank staff the suppliers of the demonetised notes will be revealed and the IT officials will then go after the crooks who hid the black money. It may take time, but it already puts the depositors in the governments radar.
                        1. G
                          GSK Murthy
                          Jan 5, 2017 at 6:16 am
                          Now, IT Department will get details of deposited amount by black money ders and see that unaccounted deposit is taxed. Where is the problem?
                          1. K
                            Jan 5, 2017 at 6:48 am
                            Govt deliberately not giving the data on how much is exactly returned. There is also some accounting confusion due to double counting. At the end, 12 lac crores could be returned leaving a profit of about 3 lac crore for Govt. But then even out of 12 lac crores, there could be taxes with penalties. uming 6 lac crores are caught without explanation of sources, Govt can net another whopping 4 lac crores!Further, we wouldn't know how much of fake notes were extinguished! With hawala & child & female trafficking stopped substantially, this move has brought in tremendous benefits to to the society & economy. No wonder indian public is able to see the post truth in the exercise beyond what media & opposition would want them to believe.
                            1. K
                              Jan 5, 2017 at 6:55 am
                              Those who deposited can take back also in due course & keep it idle. So it isnt correct to say idle money has come back into circulation forever.
                              1. K
                                Jan 6, 2017 at 1:16 am
                                Both the news-item and comments thereon missed vital points. One, the entire paper-money is flown into the system, it can get back to the ostensible owners only after leaving trails which can be pursued by the tax-men. This in itself is a major gain for the economy, it will fetch larger taxes, also set the pattern of future incomes of individuals. Second, many individuals and insutions holding 'black-money' have managed to deposit their holdings into the system painstakingly, even through touts and benamis, they all owe explanation to enable use of these funds. Third, the message has gone to the Nation, loud and clear, that it is far better to be law-abiding and pay all due taxes to lead a care-free life. In short, we might see a better India, better Indians.
                                1. L
                                  Jan 5, 2017 at 3:04 am
                                  BJP may win UP elections and go to town as vindication of demonetization. Once the real effect starts biting people continuously people will realize and silently work to show the ruling party the door. It may happen if the Government is not swift to replace the notes of 10, 50, 100 not 500 and 2,000. If the Government manages the situation well, doubtful, then the music will start. As usual the Government will spin stories with numbers happily lapped up Press (particulaly English) to showcase the move as success. The pity is no one has questioned the implicit TRust the currency proclaims and not taken to RBI to Court, which is the issuing authority. Let the Honourable Court declare the move is legal. If the demonetization is a policy, then the Government should have issued an Ordinance or come before the Parliament. Is it not ? Let us hope cash flows freely so that the common man's suffering ends
                                  1. N
                                    Jan 6, 2017 at 1:41 am
                                    Fake currency already been found in Kanpur and Gujarat. Indian people are very intelligent in copying and creativity. Demonetization drive was short sighted and in the long run people will do the same as they were doing before. In return country has gone at least 10 years back in the GDP growth. Poor became more poorer and rich had no impact in this. Less cash flow means less business and lower growth.
                                    1. R
                                      Jan 5, 2017 at 7:22 am
                                      Good for taxmen - can go after fraudsters.Good for banks - cheap money.Good for companies / common public - abundant money to borrow.Good for ried - more tax from black money can lead to less personal tax. Media always promotes the side of the coin they want to see.
                                      1. N
                                        Jan 5, 2017 at 4:00 am
                                        This was expected but it is unfortunate, the political cl and bureaucracy failed to guage the economy correctly. No fool on earth will hold illegal tender in hand when it is invalid. The good thing was bank accounts to poor helped the rich to launder the money effectively and at the end, government is loser not the rich. The demonetisation has weakened the confidence of the people on currency and resulting in low demand for goods and services. This result will be seen in Jan-March and April-Sept period of 2017.
                                        1. P
                                          P.B. Joshipura
                                          Jan 6, 2017 at 12:20 am
                                          The important question that should be asked is My God how much money was floating without being counted in the national economy? This floating money was running a parallel economy. Killing this parallel economy is a failure? Is this medium really "The Financial Express"?
                                          1. R
                                            R. Singh
                                            Jan 5, 2017 at 7:26 pm
                                            All old cahs has been banked.How on earth is this result a " blow" to the demonetization policy.The w point was to get the old currency baThe headline should be- All old currency banked. Policy a resounding success.
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