New Rs 2,000 notes to be phased out within 5 years: RSS ideologue

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RSS ideologue and noted chartered accountant, S Gurumurthy, has said that the new Rs 2,000 notes will be phased out over the next few years.

In an exclusive interview to India Today, Gurumurthy said that the Rs 2,000 note was brought in the mix only as a bridge to meet the gap in cash being taken out of circulation.

The RSS ideologue said the government was committed to moving towards smaller denomination notes and high denomination notes would be done away within the next five years.

phased out
Photo: India Today TV screenshot

Gurumurthy is a key member of the RSS-backed Vivekananda India Foundation.
Besides, the seniors in the Narendra Modi government have been closely consulting him while deciding on how to deal with demonetisation.
He said that Rs 500 should be the highest denomination currency in India, followed by Rs

He said, “If you introduce a new currency, it takes about 5-7 years to fake it. But before that we will withdraw that Rs 2,000 notes. Rs 2,000 note is only a bridge.. It is obvious, they are able to print enough Rs 500 notes and Rs 100 notes. The only way they could do it was to print Rs 2,000 notes. After that we will remonetise it without demonetising it and withdraw it.”

Reacting to Gurumurthy’s announcement, the RJD supremo, Lalu Yadav, said, “Who is he to announce such move? RBI, Finance Ministry & PM must clarify it if he is not making sense otherwise cement his statement.”

Terming the demonetisation a “Financial Pokhran”, Gurumurthy said when people have excess cash there is always an urge to buy things which are not necessary and that leads to “irresponsible and heartless spending”. Demonetisation would bring about a huge change.

“Just like Pokhran brought about a change which was unimaginable. Who would have thought America would look at India. If you had not exploded atom bomb they won’t have looked at you….

“That is why post Pokhran India is a paradigm shift likewise this ‘Financial Pokhran’ is a paradigm shift but it requires a very different mind to understand, articulate this and make people understand,” he said.

India conducted nuclear tests at Pokhran in 1998 that catapult the country into a select nuclear club.

Referring to former Prime Minister Manmohan Singh’s comment that demonetisation was a “monumental mismanagement”, that might dent GDP by 2 per cent, Gurumurthy said the demonetisation move undertaken by Prime Minister Narendra Modi was a correction for the “monumental mismanagement of the economy by the UPA government from 2004”, and if not now, demonetisation would have “remained undoable” in near future.

Gurumurthy, who is also the co-convenor of Swadeshi Jagran Manch, an RSS-affiliate, said demonetisation was planned two months after the change of guard at the Reserve Bank, and it was implied that there would be some errors in implementing the decision in short time while maintaining secrecy.

Demonetisation is not a one-stop solution for blackmoney. This requires a very major agenda… The nation is rebooting.”

He said black money is a psychological disease which has to be changed and also requires cleansing of the corrupt income tax department.

“So far as the Rs 14 lakh crore has come into the banking system, many people may declare and pay tax may be Rs 20,000-30,000 crore tax may come in. Others may conceal tax and put money in Jan Dhan accounts. Governments will chase them,” Gurumurthy said.

He said for generating this amount of black money in the system it would take another 10 years and the government will do a “definite follow up” action to not let black economy prosper.

“Organising the unorganised economy is what will happen through this,” he said, adding that demonetisation would put a break to the black money.

On 8 November, while announcing the ban on old Rs 500 and Rs 1,000 notes, Prime Minister Narendra Modi had also announced introducing new Rs 500 and replacing Rs 1,000 notes with new Rs 2,000 notes.

The Modi government was slammed for its demonetisation move, which resulred in rationing of cash and deaths of over 100 people.

The prime minister had argued that demonetisation would help curb black money and fight corruption and terrorism. Since then, the government has performed a spectacular U-turn and changed the narrative to cashless and digital economy.

 

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