December 20, 2016

Maximum Government: New rules to deposit old notes are draconian and should be rolled back

It is now time to draw the curtain on the intense pain, dislocation and hardship caused to honest citizens across the country by demonetisation. But instead of doing so the government in its inscrutable – indeed incomprehensible – wisdom, has introduced more and pettier regulations. People with old notes which exceed Rs 5,000 in value will be allowed to make just one deposit till 30 December. And that deposit can be made only if two bank officials can be satisfied that there is a good reason for not having made the deposit earlier. This is a draconian, Soviet-style measure that could amount to seizure of people’s assets. It empowers bank officials beyond their remit and is likely to be misused, generating further corruption and black money. This measure should be repealed.

Government’s first notification after Prime Minister Narendra Modi’s announcement of demonetisation on November 8 set the rules and deadline for exchange and deposit of old notes. Since then the rules have changed frequently. Demonetisation was announced in the middle of a busy agricultural season. Farmers and migrant workers may have made plans to deposit or exchange notes assuming the government’s word was sacrosanct. Long queues may have made others postpone their deposits. Now, all of them are at the mercy of bank officials who are empowered to judge intent of other citizens.

The Modi government prides itself on easing the regulatory environment for foreign multinationals. But Indian citizens and poor people surely deserve the same consideration, instead of being subject to random, arbitrary and whimsical regulations which may mutate every day. The Centre must repeal these new regulations which change the goalposts yet again. Else it will have proved that its word cannot be trusted, which bodes ill for both governance and the economy.


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