New Window To Deposit Scrapped Notes

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The finance ministry today ruled out opening another window for depositing the scrapped Rs 500 and Rs 1,000 notes, with the government now saying that it had expected all the annulled currency to be returned, in line with the latest RBI data.

While the Reserve Bank yesterday revealed that 99 per cent of the Rs 15.44 lakh crore currency junked on November 8 last year had come back, some had pleaded with the government for another window to deposit their small holding old Rs 500 and Rs 1,000.

"At this point... No way," Economic Affairs Secretary S C Garg said when asked if people can get the second window for depositing specified bank notes (SBNs) they are left with.

New Window To Deposit Scrapped Notes

After the RBI statement, the ministry had yesterday stated that "the government had expected all the SBNs to come back to the banking system to become effectively usable currency".

While the then Attorney General Mukul Rohatgi had in December last year told the Supreme Court that the government had expected only Rs 10-11 lakh crore to be returned, Revenue Secretary Hasmukh Adhia had on December 7 tweeted: "Did not make the prediction that govt expects all demonetized money to come back to the system."
Garg said most families had high-value currency notes and they used it for making payments during the pre-demonetisation era.

"I think there was a clear expectation that much of it would come back. Whether all of it would come, people had different estimates and guesses. But the Centre never said that it expects any currency not to come back," he said. He said the government had not made any statement on not expecting all of the money to return back. "I don't think the government ever made any statement in Parliament or other otherwise or as part of an affidavit" he added.

Asked about AGs statement in the Supreme Court, he said it was an opinion.
On the less than half dividend payout for 2016-17 by RBI, Garg said: "In the Budget, we had estimated Rs 58,000 crore, RBI has calculated surplus of Rs 44,000 crore, RBI has transferred Rs 30,000 crore to the government. We are discussing with the RBI whether there is scope for more transfer as we have our budget estimate at Rs 58,000 crore."

RBI had transferred Rs 30,659 crore as dividend for the financial year 2016-17, half the amount it had transferred previous year. This raised worries whether the shortfall from the dividend would disturb governments fiscal math. Chief Economic Adviser Arvind Subramanian had earlier told reporters that the shortfall in RBI dividend was in line with governments budgeted estimates.

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Read more about: demonetization, currency
Story first published: Thursday, August 31, 2017, 16:43 [IST]
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