Demonetisation: Chidambaram says similar move in 1978 failed

Saying the introduction of Rs 2000 notes is a puzzle, Chidambaram suggested the replacement of old notes must be quick

Demonetisation: Chidambaram says similar move in 1978 failed

Responding the Union Government’s decision to demonetize high-value currencies, Former finance minister a Congress leader P. Chidambaram said a similar moves in 1978 failed to curb black money.

On Tuesday, Prime Minister Narendra Modi said the current 500 and 1000 rupee notes will not be valid on Wednesday onwards and asked to the country to deposit or exchange in banks or post office across the country.

Stressing he does not encourage or support unaccounted wealth or income, Chidambaram said there’s a non-monetised economy in the country and you can't call it black money.

“Bulk of this money is legitimate money and Govt as well as banks should replace the old notes quickly” he said.

Saying the introduction of Rs 2000 notes is a puzzle, the former union minister said: “I don't understand why Rs 2000 notes have been introduced when Rs 500/1000 have been demonetized” he asked.

Earlier, talking to media after the Union Cabinet meeting, Modi announced this decision to take the currencies out of circulation saying the corruption, black money and terrorism are holding back the economy.

PM also said PM, the people of the country will have 50 days from November 10 to deposit notes of Rs 500 & Rs 1000 in any Bank or Post office.

The government on Wednesday  stated that people can deposit as much cash as they want in banks to get new notes but shouldn’t take it as an amnesty scheme for undisclosed income.

“But it should be clear that it is no immunity scheme. This (deposit) does not provide any relief from taxation. The law of land will apply (on source of fund),” Finance Minister Arun Jaitley said.

Jaitley told public broadcaster Doordarshan, that the law will take its course if the deposited cash is found illegal but assured families and ordinary citizens that they didn’t have anything to worry about.