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Demonetisation was a way of converting black money into white: Justice B.V. Nagarathna

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Demonetisation: A Flawed Attempt to Curb Black Money, Says Justice Nagarathna

Justice B.V. Nagarathna, a judge on the Supreme Court of India, has reignited the debate surrounding the controversial 2016 demonetisation policy. In a recent address, she expressed a dissenting view, stating that the move might have inadvertently facilitated the conversion of “black money” into legal tender.

Background of Demonetisation

In November 2016, the Indian government, led by Prime Minister Narendra Modi, announced the demonetisation of Rs 500 and Rs 1000 banknotes, which accounted for nearly 86% of the currency in circulation at the time. The stated objective was to combat black money, counterfeit currency, and terror financing.

Justice Nagarathna’s Concerns

Justice Nagarathna argues that the policy’s execution left much to be desired. The short window for exchanging demonetised notes and the limitations on cash withdrawals created immense hardship for many, particularly those in the informal sector.

Furthermore, she highlights that a significant portion (around 98%) of the demonetised currency eventually found its way back into the banking system. This, she suggests, raises concerns about the effectiveness of the policy in achieving its stated goals.

Justice Nagarathna’s view essentially boils down to two key points:

  • The sudden demonetisation caused significant disruption to the economy, impacting daily life and livelihoods.
  • The high rate of return of demonetised notes suggests the policy might not have been effective in tackling black money.

The Debate Continues

Justice Nagarathna’s comments add fuel to the ongoing debate surrounding demonetisation. The policy’s effectiveness remains a contentious issue, with supporters claiming it was a necessary step to curb corruption and opponents highlighting its negative economic and social consequences.

What lies ahead?

While Justice Nagarathna’s opinion is significant, it’s important to remember it reflects a dissenting view within the Supreme Court, which ultimately upheld the demonetisation policy in 2017. The debate around demonetisation’s long-term impact on the Indian economy is likely to continue.

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The weight of history hung heavy in the air as Justice B.V. Nagarathna, a lone dissenter in the Supreme Court’s verdict on demonetisation, addressed a gathering recently. Her voice, laced with a quiet conviction, resonated through the hall: “I had to dissent.”

Justice Nagarathna’s words transported everyone back to the tumultuous year of 2016. The nation watched, bewildered, as Prime Minister Modi announced the sudden demonetisation of Rs. 500 and Rs. 1000 notes – the lifeblood of India’s cash-based economy.

The stated aim – to eradicate black money, counterfeit currency, and terror financing – resonated with many. But for Justice Nagarathna, the manner of execution raised serious concerns. She recounted the hardship caused by the abrupt withdrawal of high-value notes, the long queues snaking around banks, and the desperation etched on the faces of ordinary citizens struggling to access their own money. The policy, she argued, disproportionately impacted the most vulnerable – daily wage earners, small businesses, and those in rural areas.

But her critique went deeper. Justice Nagarathna pointed out that a staggering 98% of the demonetised currency eventually found its way back into the banking system. This, she argued, cast a shadow of doubt on the policy’s effectiveness. Did it truly achieve its stated goals? Or did it simply become, as she phrased it, “a way of converting black money into white?”

Justice Nagarathna’s dissent wasn’t a mere technicality. It was a powerful voice highlighting the human cost of a policy gone awry. Her words reignited a national conversation that had begun to simmer down. Was demonetisation a bold move to cleanse the system, or a flawed experiment that caused more harm than good?

The debate continues. But one thing is certain: Justice Nagarathna’s dissent serves as a stark reminder of the importance of due process, careful planning, and a nuanced understanding of the human impact before embarking on such large-scale economic interventions.