Only War, Security Threat Warrant Note Ban: Ex RBI Guv Bimal Jalan

RBI governor Bimal Jalan from NDA-I does not agree with the secrecy surrounding Modi’s demonetisation plan. (Photo: @_ParulKaushik)

Bimal Jalan, whose tenure as RBI Governor (1997-2003) nearly coincided with the first NDA-led by Atal Bihari Vajpayee, questioned the current government’s demonetisation, saying there needed to be a good enough reason like war or a security threat to carry out such a measure.

In an interview with the Indian Express, he said that the message given to the public –when demonetisation is done for the reasons he stated – is that the government will not tolerate counterfeit money.

When you demonetise a legal tender, there must be a very good reason to do it. War, security threat. What demonetisation does is to give, as it were, a message to people that this government will not tolerate black money. The second part, which is equally relevant is, why now.

Bimal Jalan

He also questioned the air of secrecy against the measure and its implementation.

There is no reason to my mind to be secretive, unless there is an emergency. I want to do it in three weeks, or two weeks or one week, as in a surgical strike. But this is not the same thing. On that, there can’t be two views. I am talking as a citizen here.

His views are at odds with that of the government, who believed that secrecy was paramount for the success of the operation. PM Modi said on 8 November “Secrecy was essential for this action. It is only now, as I speak to you, that various agencies like banks, post offices, railways, hospitals and others are being informed.”

To Jalan, the government voicing concern about black money should have given some notice to the people who elected them into power.

It could be done in a way where people are prepared. Telling people that we are concerned about black money is also about giving them a notice. Supposing, instead of being a secret decision, if it was announced in public. What would have happened?

Currently, people are depositing their money, black (and white) into banks and the same would have happened, but maybe not to the same extent, if there had been a notice period, said Jalan. “So the, ‘why now’ is not clear to me.”

Yes, we must not allow black money to be part of our financial system or the transaction system. The second part is not everybody is a black money holder.

The former RBI governor said that over 90 percent Indians are not in possession of black money.

We are from the organised sector and we have jobs.This is where we need to strike a balance, doing something with a notice and doing it in a way where the majority of the people are not hurt. You see the end is fine, you have to carefully choose the means to achieve this end.

Source: Indian Express