New Delhi: Justifying the demonetisation of Rs. 500 and Rs. 1000 notes from the night of November 8, the Centre on Thursday informed the Supreme Court that this was a bold attempt made in 70 years to unearth black money that has been stashed over the years.
In its affidavit to a batch of petitions, the Centre said the objective behind demonetisation was to unearth an illegal parallel economy and it is aimed at reducing the ratio of cash transactions. It said that the menace of fake currency has been tackled and funding for terror groups has stopped. The apex court is to hear a batch of petitions on Friday challenging demonetisation.
Further the Centre also informed the court about the steps taken in the last few days to ease people’s difficulties to ensure that the transition was a smooth one. It said that re-calibration of ATMs is on in full swing. Further it stated that any difficulty being faced by the people would be sorted out.
The affidavit said the government earlier constituted SIT to curb black money, amended Benami Act. It said there is no shortage of new currency and already Rs. 6 lakh crores had been received as deposits in banks. The government has set up a committee which will take stock of the ground situation across the country.
The general rule is that the cash transactions in the market should not be more than four per cent of the GDP but it is 12 per cent in India.
The banks are flush with money and lending rates will come down. Alternate arrangements have been made to address the problems of farmers and traders, special teams have been sent to all the States and the situation monitored.
The Supreme Court on Friday took on the Centre over demonetisation of Rs 500 and Rs 1000 notes, saying, "There are difficulties. You can't dispute that."
"We will have riots on the streets," the apex court observed.
The Supreme Court dubbed as a "serious issue" the long queues outside banks and post offices and expressed its reservation on the Centre's plea seeking a direction that no other court in the country should entertain petitions challenging the November 8 notification demonetising Rs 1,000 and Rs 500 currency notes.
"It is a serious issue which requires consideration," a bench comprising Chief Justice T S Thakur and Justice A R Dave said, while asking the parties to be ready with data and other issues in writing.
Chief Justice TS Thakur said because of these difficulties, people are approaching the courts.
