Government is using demonetization as a weapon against the parallel economy, corruption and terrorism. Although a lot of information regarding the same is easily available, it is for people to differentiate between truth and myth. Today we will debunk the most common myths about demonetization in India.
Fact: The government has no intention to demonetize any other legal tender note right now. In future, if it plans anything like this, it will notify the civilians. In the short term, no such move will be made by the government.
Fact: Rest assured that there was no leakage of information. The government maintained complete secrecy during the planning and execution of this move. Only a few people in the government and RBI knew about demonetization of 500 and 1,000 rupees notes.
Fact: Some people had resorted to buying jewellery and gold to convert their unaccounted money into assets. To stop this, the government asked jewellers to provide PAN card information of buyers. However, there is no plan whatsoever of sealing bank lockers or freezing jewellery. This myth is entirely baseless.
Fact: No such chips are embedded in the new notes. This is just some creative rumour mongering.
Fact: Enforcement agencies are keeping a strict watch on all possible hoarders and instances of hoarding. Also, amendments have been made in Benami Transactions Act and information sharing agreements made with foreign governments
Fact: The new currency notes have a security feature called ‘intaglio printing’. A genuine currency note can be tested by rubbing it with a cloth; this creates a turbo-electric effect, transferring the ink colour onto the cloth.
Fact: Legitimate money is completely safe. Money earned through legitimate means but taxes not paid on them (black money or unaccounted money) can be declared with taxes and penalty paid on them. Illegitimate money or crime money hoarded in cash will be completely wiped out. Counterfeit money will be completely removed from the system.
Fact: Indelible ink marking will only be done for cash exchange at bank counters. There is no such rule for withdrawals.
Fact: Since the launch of Jan Dhan in 2014, more than 2.5 crore bank accounts have been opened. Considering the average family size of 4.5, almost every Indian family is covered by a bank account. Demonetization of currency notes also contributed in boosting the number of bank accounts.
Fact: Demonetization is not the only step taken by the government towards demolition of parallel economy. Earlier, Amnesty scheme and Income Declaration scheme were launched with the same objective. Further steps like the implementation of GST from April 1, 2017, strict benami property laws, extinguishing of Mauritius round-tripping loophole, new real estate sector laws, and fear of action setting in, future black money generation is expected to be seriously curtailed.
Fact: This is a very common myth regarding new notes. There are no chips embedded in the new notes.
A little knowledge is a dangerous thing. It is paramount to clearly understand the difference between a fact and a myth so that you don’t land into any trouble.