Saturday, 1 February 2014

First maiden targeted for Corruption

The first maiden is set by the RBI to withdraw the circulation of currency notes printed prior to that of 2005 as an advancement to curb black money. RBI assures exchange of all the currencies printed prior 2005 for new notes.  A study revealed that huge number of corruption cases are enrolled before 2005 and are yet to be brought before the finance ministry. The control of its circulation is expected to act as an agent in preventing the flow of black money in India. However, the most corrupted parts would remain seclude from this ideology. It is also revealed that currencies signatured by former governors such as S Venkitaraman, C Rangarajan, Bimal Jalan continue to be in circulation till today.
The currencies printed decades ago continue to be in circulation. The stipulated period of time granted for the exchange of currency notes may head troublesome situation for the public even when it rewards healthy financial transactions from thereon. RBI Governor Raghuram recognised and vindicated the fright of common public addressing them that this it is not a matter of demonetisation to be apprehensive about.  This is considered to be the motive of RBI to vandalize corruption from existence. Intrinsic value of the paper doesn’t add any value for the note, only the number printed adds for the cost. Economists factorize money is just a matter of four functions; a medium, a measure, a standard and a store. The value of notes remains standard and cannot be demonetised like that of gold without BIS mark.  The factor of demonetisation need not indulge panic in the hearts of public.
The hardship of the initiation is from July 2014, all the transactions with the issuance of 10 pieces -Rs.500 or Rs.100 notes should be enclosed with the details of the customer. This will not only shake the privacy of individuals and also award time consuming criteria for getting into exchanges. The Financial Ministry had also suggested that the new notes must have better security measures.

The ministry’s suggestion of notes with security measures was addressed as ‘anti-poor’ move by the political parties. Common people would suffer a period of tedium with the move of curbing old notes conferred as curbing corruption by the RBI. Corruption will live with new ideologies charged on the public.

1 comment:

  1. Hi Madhu, The initiation of RBI for curbing black money cannot be justified in this manner because many would go for indirect way of making the black into white. Unless otherwise the government mechanism work transparently and efficiently and when the rules are followed whole heartedly, this cannot be a success. You can recall when Mr. Chidambaram the then finance minister of India a decade ago declared to make all the black into white by paying little penalty. Even then also only around 10,000 crores of black money came out. So this exercise will not bring fruit to RBI.