VIJAYAWADA : The objective of demonetising the high-value currency notes is not yet clear and remains a puzzle for the economists of the country, former RBI Governor Duvvuri Subbarao has said. He strongly felt that the Centre should give clarity on the objective behind demonetisation.
Addressing a panel discussion on ‘The Role of Reserve Bank of India (RBI) in Demonetisation’, organised during the ongoing 28th annual book festival here on Wednesday, Subbarao recalled that the Centre initially stated that the note ban was aimed at curbing counterfeit currency.
However, sometime later, it announced that the move was targeted at black money, which existed in Rs 500 and Rs 1,000 denomination. Again, it avowed that demonetisation was aimed to tackle terrorism and then said, it was meant to promote cashless economy. “In all, there is no clarity in the Centre’s statements regarding demonetisation,” he pointed out.
“The role of RBI is not only to print and issue currency, but its primary responsibility also is to control inflation, improve the growth rate and maintain financial stability in the country,” Subbarao asserted.
No one knew as to how much black money exists in the country and the estimated figures were apparently not correct. The financial experts, too, had no clue with 86 per cent of currency in circulation being declared as invalid. Since this happened for the first time in the country, everyone started learning and understanding the dynamics of the ‘November 8 announcement’,” Subbarao noted.
“Though India is lagging behind in cyber security aspects and moving ahead with weak financial payment gateways, the RBI is regularly monitoring the financial payment gateways and ensuring security, now that people are more worried about the safety of their hard-earned money in this digital world,” he said.
Andhra Pradesh State Planning Board Vice-Chairman C Kutumba Rao felt that demonetisation was a positive step taken to eliminate black money and also to increase transparency in governance.