Many of the controversies associated with the demonetisation process that was announced in the country with long-term objectives could have been avoided if the government had better planned the circulation of new ₹500 currency notes and forestalled flip-flops in various announcements related to the surrendering of demonetised currency notes, Rudra Sensarma, a financial expert and professor in Economics at the Indian Institute of Management, Kozhikode (IIM-K), has said.
Delivering the keynote address at a seminar on ‘Demonetisation and its future effects’ organised by the Kozhikode Sustainable Development Initiative (KSDI) at Malabar Palace on Monday, Mr. Sensarma said black money deposited in multiple accounts and drawbacks in planning digital payments affected the objectives of demonetisation.
“The implementation faced a setback mainly in preventing the diversion of new currency notes from banking channels to other sources with the support of unscrupulous bankers. As a result, there was shortage of currency in many banks for commoners,” said Mr. Sensarma. He pointed out that one of the unintended effects was on the unorganised sector that contributed 45 per cent to the Gross Domestic Product and constituted 85 per cent of employment in India.
Emphasising the need to end confusion over a number of newer mobile applications for digital fund transfer, Mr. Sensarma said demonetisation could be considered only the first step to projected financial goals and the effects would be visible on the basis of a series of focussed follow-up actions. “We will be able to quantify the results only in the long run as concrete figures on the total taxation imposed on unaccounted money still remain obscure and open to speculation,” he said.
KSDI president C. Janardhanan presided over the seminar. KSDI secretary P.T.S. Unni welcomed the gathering. An interactive session was also organised at the end of the seminar.
