Pics: Umesh Marpalli
Daijiworld Media Network-Udupi (HB)
Udupi, Jan 28: “Demonetisation is a new beginning towards rooting out corruption and forming a cleaner society. Right after coming to power in 2014, PM Narendra Modi wanted to form a committee to fight against black money hoarders. Two-and-a-half years later, on November 8, 2016 he undertook a very important decision to demonize Rs 500 and Rs 1000 currencies," said Rajya Sabha member and BJP leader Subramanian Swamy in a programme at Manipal University on Saturday January 28.
He was speaking in a lecture series programme on ‘Impact of Demonetisation on Indian Economy’.
"The success of the fight against black money depends on four components: objective, priority, strategies and necessary machinery. Demonetisation is only a small part of that strategy to eliminate black money. There are measures taken to enact demonetisation which will eventually stop black money. Most of the black money hoarders avoid paying taxes by false accounting.
"Black money is used in illegal operations, purchase and sale of properties, prostitution and during the election campaigns. Such transactions are done secretly. When the unaccounted money is considered in the auditing system, we find that 40% of net transaction happening in the country in a year is black. There are various instruments to tackle that. The economy has to change by simplifying the rules.
"In 1991, Narasimha Rao and Chandra Shekhar Davan controlled black money by abolishing quotas and license. During 1950-1990 the growth rate was 3.5%. In a year Narasimha Rao raised it up to 9%.
"The Congress party came to power by misleading the people and black money once again started to thrive in the market. It was happening all over the country. As a result, Chandrababu Naidu lost power in Andhra Pradesh and S M Krishna lost in Karnataka," he said.
Commenting on the lack of preparation before demonetisation, he said, "Before demonetisation was announced, there recommendations were made as many as six times to generate 100 rupee notes which would take at least two years. There was no proper preparation made by the RBI before announcing demonetisation. That is the only the setback due to which the move by the centre was not very successful.
"The Pakistani terror outfits were misusing Indian currency for terror activities. And it was very difficult to detect black money transactions. On November 8, 2016, it was a big shock for these outfits. After the move, there has been no attack in Kashmir so far.
"After demonetisation, banks got richer and only 20% of redistribution has taken place. Demonetisation has not worked in the way it was expected to, but it was not a bad measure. Collateral damage is part of any big scale move. Poor and daily wagers suffered a lot due to the move.
“In other countries, we see good quality products and magnificent roads. In India, our progress is hampered due to corruption. Hawala agents need to be arrested in order to control black money. Abolish participatory notes and create incentives. The key to the success of demonetisation is to target the person who stands at the top in the list. When they are frightened, black money will come down. At the same time, we need to reform system by reducing the excise tax.”
“Service tax is an idiotic tax. Inflation will not decrease by decreasing the rate of interest,” Swamy added.
MP Subramanian Swamy also interacted with students and media persons after his talk.