[Marxistindia] Supreme Court Verdict on Demonetization

[news from the cpi(m)]

January 2, 2023

 

Press Statement

 

The Polit Bureau of the Communist Party of India (Marxist) has issued the
following statement:

 

Supreme Court Verdict on Demonetization

 

The verdict of the five member Constitution bench on the 2016 demonetization
cannot be interpreted as upholding this move. 

 

In the majority judgment the Supreme Court has exclusively dealt with the
legal right  of the  Central government to take such a decision and that it
does not violate Section 26(2) of RBI Act 1934. The dissenting opinion of
one of the honourable judges maintained that this Section of the RBI Act
says that the RBI must recommend to the government to initiate
demonetization. In this case the decision was taken by the Central
government which sought the opinion of the RBI. Hence, the approval of the
Parliament should have been taken before this decision was executed.  

 

The majority judgement noted that demonetization had "reasonable nexus" with
the objectives it sought to achieve and that it is "not relevant whether the
objective was achieved or not". 

 

This majority verdict while upholding the government's legal right to take
such a decision says nothing about the impact of such a decision.
Demonetization resulted in the destruction of India's informal economy that
employs crores of people. It paralyzed the small-scale industrial sector,
the MSMEs, destroying crores of livelihoods.  Reports noted that in one
month since the decision in 2016, 82 people lost their lives. 

 

Further, none of the objectives justifying this disastrous decision of
unearthing black money and bringing this back from foreign banks; ending
counterfeit currency; ending terror funding, corruption and reducing cash
flows in the economy have been achieved. On the contrary, according to RBI,
currency with public has gone up from Rs. 17.7 lakh crores, on the eve of
demonetization to Rs. 30.88 lakh crore now, i.e., an increase of 71.84 per
cent. 

 

The Supreme Court majority judgement merely upholds the right of the
government to take such a decision and in no way endorses the consequences
of such a decision. 

 

 

 

 

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