Black Money Was Converted Into White Through Demonetisation: Justice BV Nagarathna
During her recent speech at NALSAR University, Justice BV Nagarathna, judge, Supreme Court of India extensively discussed demonetisation and her dissenting opinion in the 'Demonetisation Case'.
In her dissenting opinion, Justice Nagarathna argued that the RBI did not critically evaluate the cancellation of Rs. 500 and Rs. 1000 notes, declaring the demonetisation policy as 'Contrary to Law' due to its bypassing of the legislative process. She contended that such a significant decision should have gone through Parliament or an Ordinance, rather than being executed through an executive notification.
Initially intended to eliminate illicit money, Justice Nagarathna pointed out that demonetisation's outcomes seemed contradictory, with 98 per cent of the currency returning to the Reserve Bank of India, raising doubts about its efficacy in curbing unreported wealth. She noted that it inadvertently facilitated the conversion of black money into white, deviating significantly from its intended objectives.
Justice Nagarathna emphasised the immediate impact of demonetisation on ordinary citizens, describing how daily wage earners struggled when their old currency became worthless overnight, highlighting a disconnect between policy intentions and real-world consequences. She also criticised the lack of proper communication and preparation surrounding the decision, stating that the abrupt announcement caused chaos and did not facilitate a smooth transition to a digital or plastic currency-based economy.
Source: Live Law
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