University of Mysore retired Prof C K Renukarya opined that not ’50 days,’ but a year may take for normalcy to return in the country with regard to the availability of cash to meet the demands of the public. A huge gap in the currency printing and the requirement, he cited to be reason to establish his statement.
Delivering a lecture on ‘Demonitisation: Its effects on economy,’ organised by the Antharasanthe Prakashana on Monday, Prof S Renukarya pointed out that while 46.9 billion currency notes were required after demonitisation, only 35.5 billion notes have been printed so far.
He said though demonitisation was good for the country, there was lack of preparation in the run up to its announcement. “Government might have advanced its introduction fearing that its plans may get leaked.”
He stressed that measures ought to be taken to rein in smuggling, narcotic drugs, benami properties, Swiss bank accounts to effectively curb black money. The demonetisation can destroy just 3 per cent of the black money in cash, he said.
Prof Renukarya added that even FDI was an easy route to convert black money into white. “It’s just a small beginning of huge task. Just by demonitisation, black money cannot be destroyed in a big way.”
Further, he said that given the connivance of bank officials, it is not a surprise if the entire black money comes into the banking system.
Prof Renukarya said historically demonitisation has not be successful in many parts of the country and it drowned the economy in Nigeria, Ghana, Zimbabwe, North Korea, Russia and others. But it was inevitable in India given the huge amount of black money, terror funding, counterfeit currency, corruption in electoral practices, etc. Failure on the part of the government to bring back black money from Swiss accounts also forced it to go for note ban, he added.