How the Indian Government Successfully Implemented the Note Ban Without Alerting the ‘Bad Guys’

The Indian government's decision to ban 500 and 1000 rupee notes on November 8, 2016, was a crucial step in addressing the issue of black money in the country. The government managed to execute this bold step without any leak or premature alert to the individuals involved in such activities. This article explores the reasons behind this success and the steps taken to achieve it.

Formation and Role of Special Investigation Team (SIT)

Almost ten months prior to the announcement, the government established the Special Investigation Team (SIT) to investigate the problem of black money. The SIT was formed with the primary aim of conducting a root cause analysis. The task of the SIT, however, remained highly confidential, with the government deciding to disclose this plan only on November 8, 2016, at 8:00 PM. The Prime Minister, Narendra Modi, addressed his cabinet ministers and informed them about the discontinuation of 500 and 1000 rupee notes. The ministers were instructed to leave their cell phones outside the room to ensure there were no premature leaks.

Preventive Measures to Ensure Secrecy

Several measures were taken to ensure the secrecy of the plan. The government needed a temporary but solid solution, and revealing the secret ahead of time could have spoiled everything. Additionally, the move was credited to the newly appointed governor of the Reserve Bank of India, Urjit Patel, who wanted it to be meticulously implemented. Another interesting factor is the timing of the announcement, which coincided with the festival season of Eid and Diwali, following the conclusion of the Chhath festival. This timing made it difficult for experts to predict the move. As many were preoccupied with the U.S. election, the demonetization announcement caught many off guard.

Steps Taken to Combat Black Money

To effectively tackle the issue of black money, the Indian government took several steps:

1. Invalidation of Old Notes

On January 2014, the validity of 500 rupee notes printed before 2005 was declared invalid. This step aimed to wipe out a significant portion of old black money from the market.

2. Introduction of PMJDY Scheme

On August 15, 2014, the Prime Minister launched the PMJDY (Pradhan Mantri Jan Dhan Yojana) to enable every person to open a bank account, either rich or poor. This step sought to ensure that everyone could exchange their money in the future.

3. IRS Volunteer Income Tax Assistance

From September 30, 2016, the government introduced IRS (Volunteer Income Tax Assistance) to allow Indian citizens an opportunity to declare their hidden income and properties. The initiative required only a 45% payment of the total amount, and the government received approximately 45000 crore rupees in tax revenue from this scheme.

4. Infamous 8th of November Demonetization

On November 8, 2016, the government banned 500 and 1000 rupee notes, and introduced a new 2000 rupee note. Despite the ban, social media platforms and mobile phones were flooded with jokes and pranks, creating an illusion of the new notes being worthless. This misdirection further helped in the government's mission to wipe out black money.

Narendra Modi's decisive decision continues to be a global sensation, inspiring debates and discussions in various media platforms. It is a testament to the government's commitment to eradicating black money and promoting transparency. As we move forward, let us follow the mantra to earn, live, and work hard, making saving an outdated tradition.

Keywords: note ban, black money, Indian government, PM Modi, 500 and 1000 notes