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Friday, February 28, 2014

Currency Notes Rollback

(Published in Assam Tribune on dated 23-02-2014 at Editorial Page)
Dr. Devajit Mahanta

The Reserve Bank of India (RBI) issued the circular that after March 31, 2014, will completely withdraw from circulation all bank notes (10, 20, 50, 100, 500 and 1,000 rupee notes) issued before 2005.  The objective of the new circular based on two main pillars, first rationalization of currency notes with better security features and second flushing out the unaccounted or black money stored in bank and personal lockers. The RBI says the rationale is to remove pre-2005 notes from the market because they have fewer security features compared to bank notes printed after 2005.

Now the question arises how general public will know if the rupee note they have is pre-2005 and what`s supposed to do with notes issued before 2005? These notes can be easily identified by check the reverse side of the currency notes where notes have the year of issue printed in the middle of the bottom row whereas the pre-2005 notes do not have this features. If you have such notes you will continue to be use in exchange for goods and services till 31 March and from first April to first July 2014 customer can approach any bank to exchange pre-2005 notes. In case if any customer not able to meet the first July deadline then customer have to go through some limitations like if customer wants to exchange more than 10 of the Rs.500 notes or Rs.1000 notes, then require to furnish proof of identity and residence for changing these at a bank where he or she does not have an account. Customer can exchange any number of notes through their own bank account. However, the bank existing rules on depositing and withdrawing cash will remain same. If account holder deposits cash above Rs.50000 the bank will ask for PAN card number and if deposit above Rs.10 lakh in a month, a system generated cash transaction report will go to Financial Intelligence Unit (FIU) and income tax authorities.

Going by the RBI’s Annual Report for 2004-05, 36,984 million pieces of notes valued at Rs 3,61,229 crore will be impacted as they are issued. Out of 421 million Rs.1000 notes valued at Rs.42082 crore and 3055 million Rs.500 notes valued at Rs.152728 crore. The RBI new circular will make it difficult for those who have a huge amount of money to short the notes and get them exchanged. If we look back to history to curb unaccounted money RBI demonetized Rs.1000 and Rs.10000 bank notes which were then in circulation were demonetized in January 1946. Again 1000, 5000 and 10000 rupee notes were re-introduced in 1954 and these bank notes were again demonetized in January 1978, of these Rs.1000 note was reintroduced later. Every time unaccounted or black money holder finds out the ambiguity and loopholes in the law and take the advantage of that. But for the first time RBI declared based on certain year to rollback of all currency notes to flash out unaccounted money and hoping that this time there has to be some success. Still sincere effort by Government and RBI require in certain aspects like unaccounted or black money holder may buy gold or any foreign currency like dollar, euro etc. through the hawala route instead of going to the bank of exchange of notes and gets a tax notice. Also require to monitor that such high value notes could go in for more spending through the cash route or they may approaching agent who will swap the notes for a commission. RBI generally manages currency in India and Government decides on various denominations of notes to be issued. RBI coordinates with the Government in the designing and security features of the notes. Also on behalf of the Government estimates the quantity of notes that are likely to needed denomination wise and accordingly printed out.

Parliament Disruption costly affairs

(Published: Assam Tribune, 09-08-2013 at Editorial Page)

                                       By Dr. Devajit Mahanta (Email:

The Parliament of India founded in 1921 is the supreme legislative body in India. The Parliament comprises the President of India and the two Houses, Lok Sabha (lower house) and Rajya Sabha (upper house). Lok Sabha which also known as the House of the People all of its members (at present, the strength of the house is 545 members)  are directly elected by citizens of India on the basis of universal election process except two who are appointed by the President of India
The objectives of parliamentary oversight are to ensure transparency and openness of executive activities. Parliaments shed light on the operations of government by providing a public arena in which the policies and actions of government are debated, scrutinized, and subjected to public opinion. Another important objective are provide financial accountability. Parliaments approve and scrutinise government spending by highlighting waste within publicly funded services. Their aim is to improve the economy, efficiency and effectiveness of government expenditure.

According to data maintained by the Lok Sabha secretariat, 14th Lok Sabha (2004-2009) lost more than 22 percent of the parliament time. Even 15th Lok Sabha (2009-2014) so far lost around 32 percent of the parliament time due to contentious issues like Telangana, 2G, Commonwealth games, Coalgate and regional parties also being major disrupters. All political parties should realize that they have important legislation to discuss during the session. When there are differing opinions on the same issue, the only way the nation can choose the most convincing argument is through a debate in Parliament.

A estimate made by the Lok Sabha Secretariat puts the cost of an hour work of parliament at Rs. 25 Lakh, the total exchequer lost about rupees two crore a day. Add the number of days and hours wasted the loss figures at the end of each session is huge. Now the question arise who is responsible or liable for disruption of hours and money, our parliamentarians or our system?

As per the official legislative research report Lokh Sabha which normally meets for five hours a day during the 15th session was in for just about half-an-hour as it had adjourned due to the pandemonium of BJP`s and other opposite parties parliamentarian though they have important legislation like food security bill and others to discuss in this session. The role of opposition should protect the rights of citizens by monitoring policies and examining potential abuses of power, arbitrary behaviour, and illegal or unconstitutional conduct by government. Under parliament rules, disruptions are allowed to show the protest of the opposition on the functioning of the Government but when the protest shown inside the house, the Government gets the accountability. Even in the earlier when parliament loss valuable times in most of the cases the members worked late and compensated the loss parliament time. Now it has become a fashion among the big or small parties to disrupt the parliament even for their regional issues. Many times people try to blame the individual parliament members for disruption but we should understand that no individual MP can take a decision on disruption. It is the party leadership that takes decision on disruptions and the members have to simply obey the directions to draw the national attention of their local issues through TV channels and print media. Why bother organising a rally at Ramlila Maidan to make their point, when they can get TV cameras to cover the ruckus they create in Lok Sabha?  Importance given by the media for the negative stories is also the main contributor for such disruptions. Question arises whether we the people of India spend thousands of crores of rupees on elections only to see this.

Generally out of 547 MPs only about 60 to 70 MPs (all parties) contribute nearly seventy percent of the debates and questions, so when the regional parties disrupt the parliament time active MPs lost their chance to protest their views in spite of their preparations. During the last Lok Shabha session one of the MPs bill got listed where he planning to submitted a Private Members bills to start an institution to refinance education loans. This institution can help cores of poor students to pursue higher education at very low cost finance facility. But unfortunately this bill not able to introduced due to disruptions, even if it introduce in the next session the question arise whether parliament will have time to discuss on this bill. This is just an example; many of such bills may go without discussion in the Lok Sabha. The particular MP got dejected in spite of his preparations not able to introduce the bill and speak on this. During the last 15th session of  Lok Shabha 370 bills were planned for introduction but only 172 could be introduced due to disruption of hours. Out of this 172 only 99 bills have been passed but pathetically even in this 29 bills were passed without discussion.

If we closely analyse the situation, disruption helps the Government more by not facing Parliament, while blame goes to opposition. When the country is facing lot of challenges from within and outside such disruption was fuel to fire among the citizens and may lose faith on the democratic institutions. In such a glooming scenario rather than Government taking the advantage since they do not want to face the parliament due to various scams and mishandlings it is the responsibility of the Government to enter into dialogue with the opposition leaders and find a way out to run the parliament smoothly in the interest of the nation. As parliament is the place where selected MP can express their public view there should be the rule for protest but if protest cost loss of parliament hours then it should get compensated by sitting extra hours. So far there is no rule that stipulates minimum number of working days for parliament, now the time has come that parliament should pass a resolution to work for a minimum number of days without disruption. This is one of the best way can find a solution to make every Indian make feel proud of our constitutional democracy.