---------- Forwarded message ---------- From: p.v. narayanan > Date: Mon, Nov 21, 2016 at 9:53 PM Subject: Fwd: Did Raghuram Rajan know about the demonetization scheme of Modi? To:
Date: Mon, Nov 21, 2016 at 6:55 PM Subject: Did Raghuram Rajan know about the demonetization scheme of Modi? *Did Raghuram Rajan know about the demonetization scheme of Modi? <https://www.quora.com/Did-Raghuram-Rajan-know-about-the-demonetization-scheme-of-Modi> Quora.com* Alok Nanda <https://www.quora.com/profile/Alok-Nanda-1>, explorer The following persons only were aware of the plan. 1. PM Narendra Modi 2. Finance Minister Arun Jaitley 3. RBI Ex-Governor Raghuram Rajan 4. RBI Governor Urijit Patel 5. Secretary of Economic Affairs Shaktikanta Das 6. Secretary of Investments & Currency Dr. Saurabh Garg 7. and a few others in finance ministry. Because the plan was finalized six months back and Mr. Rajan left office on 4th September 2016 only. So such a decision can’t be carried out without the approval of RBI Governor. The detailed execution went something like this. *Before Six Months-* Plan was finalized and execution for the D-Day started. *June -* Banks were directed to dispense more 100 rupee note by RBI. *Before three Months-* Design of new 500 & 2000 rupee note was finalized and went for printing at Mysuru Mint press. PS: Only the design of the plate was finalized. The printing didn't start that time as Mr. Rajan denied continuing for next term and new governor was declared. *The printing facility at Bharatiya Reserve Bank Note Mudran Private Ltd. (BRBNMPL) in Mysuru under Reserve Bank of India was set up with the De La Rue Giori, now KBA Giori, Switzerland.* *20 August -* Mr. Urjit Patel was declared as new governor. *4 September -* Mr. Urjit Patel joined office as new governor and gave a green signal to Modi for demonization after a thorough discussion. He sent his signature sample in English and Hindi to be added to newly designed 2000 currency plate. *5–6 September -* Signature was added to the plate and new dye was made. Printing of currency started. *27 October -* The central bank put out a warning about fake currencies on its website. It asked banks to put entire banking areas under CCTV surveillance and ensure that cash receipts in the denominations of Rs 100 and above are not put into re-circulation without the notes being machine-processed for authenticity. *The CCTV surveillance is now being used to monitor and record all the money exchanges that are taking place at banks.* *2 November -* Banks were directed again to dispense more Rs 100 notes through ATMs within the next fortnight. *7 November -* The Heads of currency management divisions in all banks received a confidential communication from the Reserve Bank of India (RBI) to be present at the headquarters. *8 November Morning-* They were given charge of a double-locked currency chest, which they were told contained currency notes of the new denomination: Rs.2,000. *Though it also had the RS 500 new notes, but it wasn’t disclosed.* *8 November 7 PM-* All MDs of banks were called for a meeting at RBI and were kept waited till 8PM. At PMO office, all cabinet ministers were called for a meeting, but no one was allowed to carry mobile. *Privacy was of top most priority. Even leak of the news by a few minutes could have caused disaster.* *8 November 8 PM-* Disclosure of demonetization by PM on National TV. *The entire nation came to know about it at the exact same time.* A master stroke that left the nation spellbound ! But the question to ponder is - Did Mr. Rajan leave the office, because he wasn’t in full support of the plan ? *Here is what he had to say on demonitization in 2014:* *“I am not quite sure if what you meant is demonetise the old notes and introduce new notes instead. In the past demonetisation has been thought off as a way of getting black money out of circulation. Because people then have to come and say "how do I have this ten crores in cash sitting in my safe" and they have to explain where they got the money from. It is often cited as a solution. Unfortunately, my sense is the clever find ways around it.* *They find ways to divide up their hoard in to many smaller pieces. You do find that people who haven't thought of a way to convert black to white, throw it into the Hundi in some temples. I think there are ways around demonetization. It is not that easy to flush out the black money. Of course, a fair amount may be in the form of gold, therefore even harder to catch. I would focus more on the incentives to generate and retain black money. A lot of the incentives are on taxes.* *My sense is the current tax rate in this country is for the most part reasonable. We have a reasonable tax regime, for example, the maximum tax rate on high-incomes is 33%, in the US it is already 39% plus State taxes, etc., it takes it to near 50. We are actually lower than many industrial countries. Given that, there is no reason why everybody who should pay taxes is not paying taxes. I would focus more on tracking data and better tax administration to get at where money is not being declared. I think it is very hard in this modern economy to hide your money that easily.”* Source - Livemint <http://www.livemint.com/Politics/Q8JWVH1t4uuUcSSF4AZzDI/Scrapping-of-Rs500-Rs1000-currency-notes-was-in-the-works.html> Edit1: The new 2000 currency note was initially printed at Mysuru Mint. Thank you Rajeev Agur <https://www.quora.com/profile/Rajeev-Agur> for pointing this out. Reference <http://economictimes.indiatimes.com/news/economy/policy/printing-of-rs-2000-banknotes-began-in-aug-sept-in-mysuru/articleshow/55368130.cms> Edit2: Those who are cursing the government for demand supply mismatch of notes should read below possible reasons. a) Had Mr. Rajan had continued as governor, the scenario could have been different. More 2000 notes could have been printed due to availability of time. b) Only one printing press (Mysuru) was used to print the new notes initially. So it limited the printing capability and increased the distribution duration to all banks across the country. c) Only availability of 100 rupee notes decreased ATM's capability in terms of value. d) Change in dimensions of the currency note increased ATM upgradation time both in terms of software and hardware. e) The no of ATMs for withdrawal got reduced as CDMs couldn't be used for withdrawal. Otherwise people would get same old currency deposited by some other person. Raja -- P.V.NARAYANAN -- You received this message because you are subscribed to the Google Groups "Thatha_Patty" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. For more options, visit https://groups.google.com/d/optout.
