Demonetization had no effect on Indian Economy: Finance Minister

Days ahead of presenting her maiden Budget, Union Finance Minister Nirmala Sitharaman Tuesday said that the demonetisation did not have any effect on the Indian economy. The minister was speaking in the Rajya Sabha responding to supplementaries during the Question Hour.

Sitharaman said economic growth is high on the agenda of the Narendra Modi-led government and various reforms are being undertaken in many spheres to improve the GDP growth. Sitharaman will present the first budget of the new government on July 5th. 

"If the impact of low growth in certain sectors has impacted growth rate, particularly in agriculture and allied activities as also in financial and real estate and professional services, there has been a fall, particularly in agriculture based on third advance estimates, it is believed that there has been a 0.6 per cent decline in the output. If the impact on the low growth is because of outcomes from these sectors, the manufacturing sector has had a certain fall but which is not attributable to demonetisation," the minister said.

Sitharaman, who held the defence portfolio in the previous government, said that India is growing well above 7 per cent at a time when the United States has grown between 1.6, 2.2, 2.9 and 2.3 per cent in 2016, 2017, 2018 and 2019, respectively. She also said China’s growth decelerated from 6.7, 6.8, 6.6 and 6.3 per cent during the corresponding period.

In her written reply, the Finance Minister said as per estimates available from Central Statistics Office, the GDP at constant prices was 6.8 per cent in 2018-19, as compared to 7.2 per cent in 2017-18 and 8.2 per cent in 2016-17.

However, the Growth rate has been steadily falling in 2018-19, from 8 per cent in Q1 to 7 per cent in Q2, 6.6% in Q3 and 5.8% in Q4.

“Economic growth is high on the agenda of the Government. Various reforms are being undertaken by the Government in many spheres to improve GDP growth. The key reforms in Government’s new term include expansion to all farmers the cash transfer scheme ‘PM-Kisan’ providing income support of Rs 6000 per year, which was earlier limited to farmers with a land holding of less than 2 hectares,” she said.

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99.3 Percent of demonetised notes returned to Banks: RBI

As much as 99.3 per cent of the junked Rs.500 and Rs.1,000 notes have returned to the banking system, the RBI said today, indicating that just a miniscule percentage of currency was left out of the system after the government's unprecedented note ban aimed at curbing black money and corruption.

The Reserve Bank of India (RBI), which has taken an awfully long time to count the currency that was returned in the limited period window provided by the government to exchange or deposit the demonetised currency, said in its Annual Report for 2017-18 that the exercise is finally over.

Of the Rs.15.41 lakh crore worth Rs.500 and Rs.1,000 notes in circulation on November 8, 2016, when the note ban was announced, notes worth Rs.15.31 lakh crore have been returned.

This meant just Rs.10,720 crore of the junked currency did not return to the banking system.

After the note ban, old junked notes, called specified bank notes, were allowed to be deposited in banks with unusual deposits coming under income tax scrutiny.

The "humungous task of processing and verification of specified bank notes was successfully achieved," it said.

The specified bank notes received were verified, counted and processed in the sophisticated high speed currency verification and processing system (CVPS) for accuracy and genuineness and then shredded, it added.

RBI said the processing of specified bank notes has since been completed. "The total specified bank notes returned from circulation is Rs.15,310.73 billion."

A collateral damage as a result of rise in printing and other cost was dividend RBI pays to the government.

The government replaced old Rs.500 notes with new ones, but no replacement for Rs.1,000 notes have been made. Instead, a new Rs.2,000 notes were introduced post note ban.

Post-demonetisation, RBI spent Rs.7,965 crore in 2016-17 on printing new Rs.500 and Rs. 2,000 and other denomination notes, more than double the Rs.3,421 crore spent in the previous year.

In 2017-18 (July 2017 to June 2018), it spent another Rs.4,912 crore on printing of currency, the annual report said.

The demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency but RBI said, "Counterfeit notes detected in specified bank notes decreased by 59.7 and 59.6 per cent in the denominations of Rs.500 and Rs.1,000, respectively."

"Compared to the previous year, there was an increase of 35 per cent in counterfeit notes detected in the denomination of Rs.100, while there was a noticeable increase of 154.3 per cent in counterfeit notes detected in the denomination of Rs.50," RBI said adding that counterfeit notes detected in the new Rs.500 and Rs.2,000 notes during 2017-18 were 9,892 and 17,929 as against 199 and 638, respectively, during the previous year.

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Demonetisation data released by the RBI

• Rs 16,000 crore was not deposited back to the banks in the Demonetisation,2016.
  
  the Reserve Bank of India (RBI) today said out of the Rs 15.44 lakh crore of notes taken out of circulation, Rs 15.28 lakh crore was returned to the system by way of deposits by the public.
  

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RBI: No limits on cash withdrawals through ATMs from February 1

The Reserve Bank of India (RBI) has removed limit on ATM withdrawal put in place after the November 8 ban on circulation on Rs 500, 1000 notes. The new rule will be applicable from February 1.The weekly limit of Rs 24,000 withdrawal will continue, the top bank said, adding that it will review withdrawals from Savings Accounts in the near future.

A notification issued by the RBI stated: "On a review of the pace of demonetization, it has been decided to partially restore status quo ante as under:Limits placed vide the circulars cited above on cash withdrawals from Current accounts/ Cash credit accounts/ Overdraft accounts stand withdrawn with immediate effect.

The limits on Savings Bank accounts will continue for the present and are under consideration for withdrawal in the near future.Limits vide the circulars cited above placed on cash withdrawals from ATMs stand withdrawn from February 01, 2017. However, banks may, at their discretion, have their own operating limits as was the case before November 8, 2016, subject to 2 (ii) above.

Following demonetization of old Rs 500/1000 notes on November 9, limits had been imposed on withdrawal of cash from banks as well as ATMs. The Reserve Bank cash withdrawal limit from ATMs was increased to Rs 4,500 per day from Rs 2,500 from January 1.

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Bank employees to hold all India strike on February 7

Three bank employees' organisations are planning to conduct all India strike on February 7, 2017, seeking the banks and the government to address issues concerning demonetisation and bad loans.

The All India Bank Employees'Association (AIBEA), All India Bank Officers Association (AIBOA) and Bank Employees Federation of India (BEFI) have issued a joint circular to its members announcing various protest including joint mass demonstrations, dharana and one-day strike starting from January 30, 2017.

The organisations alleged that the cash crunch is continuing and most of the ATMs are still non-functional, which lead to tension in banks. They alleged that while everyone appreciated the hard work of the bank employees, officers and managers in managing the situation in the banks, there is reluctance and hesitation in extending proper compensation for the extra hours of additional work.

"When the ordinary and common people are made to face such problems in the name of curbing black money, the big defaulters of bank loans are getting scot-free. No action is being taken against the increasing menace of huge bad loans in the banks except provisions from profits, write-offs and desperate sale of NPAs," says the circular.

The demands they put forward include the demonetisation issues such as ensuring supply of adequate cash to all banks including regional rural banks and co-operative banks; restore all ATMs immediately and ensure availability of cash in ATMs; announce CBI enquiry on instances of huge new currency notes with some big persons when branches are starving on cash and stop diluting autonomy of RBI in currency management.

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Bank Union seeks overtime for extra work due to demonetisation

Days after Prime Minister Narendra Modi praised bank employees for the hard work done during the demonetisation period, a bank union has demanded overtime for the extra hours put in by staff during the 50-day window that ended on December 30.

National Organisation of Bank Workers (NOBW), an affiliate of Bharatiya Mazdoor Sangh, in a letter to the Prime Minister said, "Bank employees have worked 12 to 18 hours a day during the last 50 days. Only few banks have considered overtime for extra working. Kindly advise the management to consider the overtime for beyond working hours worked by bank employees."

It also called for stepping up recruitment activities and said that banks are understaffed for implementing all schemes.

NOBW vice president Ashwani Rana also pitched for a decent salary hike in the wage revision due in November this year.

"Wage revision of bank employees is due on November this year. The government has already advised IBA to implement it on due date. We wish to bring to your (PM Modi) kind notice that bank employees are far behind government employees in salary structure. Kindly give a good rise to bank employees and bring them at par with Govt employees," it said.

In his address to the nation, Prime Minister had said "during this period, bank employees have worked day and night. Female employees too worked till late hours as part of this mission".

Post office staff, banking correspondents - all did exceptional work, he had said.

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Demonetisation Rush at Banks has Cashiers 'Weeping', Say Bank Unions

The massive rush at bank branches to exchange scrapped currency notes post the demonetization drive has cashiers “weeping” as they end up paying from their own pockets for mistakes committed out of “high level of stress,” bank employee association leaders told.

Every employee in a bank these days is a cashier, Sharma said, pointing out that the role of a cashier is one which demands a certain level of expertise.

“But fearing angry customers, employees from peon to a manager are working as cashiers, and they often make mistakes while dealing with the crowd which leads to their own financial loss,” Sharma said.

According to RBI, various banks across the country has received Rs 5,44,571 crore in deposits and old notes submitted for exchange from the time banks reopened after currency demonetisation till November 18, the Reserve Bank of India (RBI) said. This includes deposits of Rs 5,11,565 crore and exchanged currency notes of Rs 33,006 crore.

CH Venkatachalam, General Secretary of the All India Bank Employees Association, claimed he has received thousands of complaints from banking staff across the country post the demonetisation announcement.

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Features of new Rs 500 and Rs 2000 notes in india

November 8, 2016 came as a bolt from the blue for people across the country even as they learnt they would not be able to use notes of INR 500 and INR 1000 as readily as they were able to do before and soon (by 31st March, 2017), these notes would be reduced to being mere pieces of paper as stated in an address by Prime Minister Narendra Modi.

The decision, announced at 8 p.m. on 8th November by PM Narendra Modi has been taken in order to come down hard on people stashing black money in cash as well as people peddling counterfeit notes. It has also been announced in such a way that the corrupting elements are unable to prepare themselves in any way to counter this sudden ‘financial catastrophe’. The levels of corruption have reached such a stage that it is estimated that the black money accumulated in India, in various shapes and forms, is worth around billions of dollars. The Indian Government is attempting to bring all this unaccounted money back into the system.Now, even as the country discusses the justification of such a decision, a lot of people may have missed an announcement by the Prime Minister, who stated that very soon the Indian Government would be introducing notes of INR 500 and INR 2000 in the market. These new notes are expected to be introduced in a progressive manner from 10th November, 2016 onwards.

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7-Year Jail For Illegal Cash Deposits, Tax Department Warns Violators

Warning people against depositing their unaccounted old currency in someone else's bank account, the tax department has decided to slap charges under the newly enforced Benami Transactions Act against violators that carries a penalty, prosecution and rigorous jail term of a maximum seven years.

In a related development, official sources said that the department has detected over Rs 200 crore in undisclosed income after it conducted over 80 surveys and about 30 searches in cases of suspicious usage of the scrapped currency. About Rs 50 crore has also been seized in these operations since November 8, they said, across various states.

The sources said the taxman has initiated a country-wide operation to identify suspect bank accounts where huge cash deposits have been made post November 8, when government demonetised the Rs 500 and Rs 1000 currency notes. 

Such instances where the suspicion is found to be true will be prosecuted under the Benami Property Transactions Act, 1988, applicable on both movable and immovable property, that has been enforced from November 1 this year.

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