Demonetization won't unearth black money

New Delhi, Nov 9 : The government decision to axe Rs 500 and Rs 1,000 notes will not unearth black money and "is more like political posturing", the CPI-M said on Wednesday. "The claim that the demonetization will check black money, fake currency corruption and terrorism lacks substance," the Communist Party of India-Marxist said in a statement.

"By the Prime Minister's own admission, the bulk of black money generation and storage is in off-shore accounts in foreign currency. "Counterfeit currency can be generated for any denomination. The announcement of a new Rs 2,000 note alongwith another Rs 500 note does not in any way prevent future possible counterfeit circulation.

"It's an established fact that terrorist funds flow through electronic transfers and not through currency transactions," the party said.It said that by allowing the conversion of the existing 1,000 and 500 currency notes within the prescribed time limit, no effective measure was there to prevent benami conversions.

"In effect what this would result in is a total disruption of the payments and settlements that are part of daily life of our economy," the CPI-M said.

"It will burden the vast mass of our people from daily wage labourers, fishermen, small businesses, traders and vendors selling at the door step. What is going to happen is the disruption in livelihoods and bureaucratic harassment of ordinary people who wish to change the currency notes.

"The basic avenues for money laundering through participatory notes and diversions through tax havens remains untouched. There is no attempt to curb the roots of generation of black money such as in the real estate sector.

"This is a measure to cover up the utter failure of the Modi government on the economic front, of joblessness, high prices and no pick-up in domestic demand, crippling all sections of our population, especially the working classes, and ruining the peasantry," the CPI-M said.

The CPI-M urged the government to make public forthwith the names of those holding bank deposits and accounts in tax-havens and those refusing to return humongous loans from nationalised banks estimated at over Rs 11 lakh crore "if it is really committed to recover and curb black money".

Earlier, CPI-M General Secretary Sitaram Yechury tweeted: "This is attempted as a gimmick to divert attention from serious social and political failures of this government in the past 2.5 years.

"What is the cost of withdrawing currency notes and replacing them with Rs 2,000 notes? Also, its economic and social costs must be made public," he said, dubbing the move to be another "jumla".

"What are the estimates of black money that will be curbed by this move? Government should make the figures public."

Prime Minister Narendra Modi announced on Tuesday night that Rs 500 and Rs 1,000 currency notes will cease to be legal tender from midnight of Tuesday. He said this was aimed at battling black money.