TEXT :
14.26 hrs.
THE MINISTER OF FINANCE (SHRI YASHWANT SINHA): I beg to move :
"That the Bill to amend the High Denomination Bank Notes (Demonetisation) Act, l978, be taken into consideration."
Mr. Chairman, the yearly demand for fresh currency notes has been growing at the rate of l5 to 20 per cent. In order to increase the production of currency/bank notes, the Government has initiated several measures like (l) modernisation of the existing two note-printing Presses at Nasik and Dewas; (2) setting up of two new note presses under the control of RBI; (3) introduction of Rs.500 notes to relieve pressure on Rs.l00 denomination note; and (4) import of printed notes to the extent of 3600 million pieces (2000 million of Rs.l00 and 1600 million pieces of Rs.500 denomination) of a total face value of Rs.l,00,000 crore. Despite these measures, the demand-supply gap of fresh notes is expected to go up to l2680 million pieces by 2005. The year-wise gap is as follows:
Year Shortfall
l998-99 5574 million pieces
l999-00 2300 -do-
2000-01 4350 -do-
200l-02 6600 -do-
2002-03 7480 -do-
2003-04 9580 -do-
2004-05 12680 -do-
The Government has, therefore, proposed to print Rs.l000 notes in order that the note-supply position in the country is improved.
Sir, prior to 1978, we had in circulation high denomination notes of Rs.l000, Rs.5000 and Rs.l0000. However, as per provisions of the High Denomination Bank Notes (Demonetisation) Act, l978, all these high denomination notes have ceased to be legal tender in payment or on account at any place on l6.l.78, i.e., the date on which the above mentioned Act had come into force. In order to facilitate issue of the proposed Rs.l000 notes, the High Denomination Bank Notes (Demonetisation) Act, l978, would require amendment.
While the preamble to the High Denomination Bank Notes (Demonetisation) Act, l978, states that "the availability of high denomination bank notes facilitates the illicit transfer of money for financing transactions which are harmful to the national economy or which are for illegal purposes", I am sure that the honourable Members of this august House will share my view that the root cause for illegal transaction lies not in notes of high denomination but elsewhere.
It is a well known fact that the purchasing power of the rupee has gone down considerably since l978, i.e., when the high denomination notes were demonetised. In terms of movement in Consumer Price Index (base l982 = l00), the value of Rs.l000 would now be only Rs.l60 -- which entails that an average consumer requires notes of a higher face value for his normal cash transaction.
In the above background and till such time other methods of payment gain root, it would be in public interest, to introduce higher denomination note of Rs.l000 to meet the demand of high value cash transactions.
Sir,may I now move for leave of this Hon'ble House for consideration and passing of the "High Denomination Bank Notes (Demonetisation) Amendment Bill, l998?
MR. CHAIRMAN : Motion moved :
"That the Bill to amend the High Denomination Bank Notes (Demonetisation) Act, l978, be taken into consideration."
... (´ªÉ´ÉvÉÉxÉ)
There are very alarming reports appearing in the newspapers in recent days that high denomination notes are being printed outside. The other day, the Times of India reported that high denomination currency notes are printed in Pakistan and are being smuggled into India. It is in circulation in large quantity. I do not know what is happening. What are the steps being taken by the Government for checking this smuggling of currency notes? When the note in circulation was not sufficient for the requirement of the country, we had decided to print notes outside. As stated by the hon. Finance Minister, currency notes are not only printed in India but also outside and then they are brought to India. Many of the currency notes which are in circulation in the country today are printed outside only.
I would like to invite the attention of the hon. Minister whether he has ever examined the functioning of the Security Presses in India which are printing the currency notes. The two currency notes printing presses are in India. Are they working to their optimum capacity?
As a Member of the Committee on Finance, I remember the discrepancies in the functioning of the currency printing presses in India, which were brought to the notice of the Standing Committee. In this regard, in one of the reports, the Standing Committee has made a recommendation also to this House. The fact is, today India cannot have the facility to print its own currency notes also. It is not difficult for a country like India to build up the facility of printing currency notes, printing with the latest offset press or whatever kind of sophisticated printing facility which is available. The fact is that two of the Presses in India are not working to their optimum capacity and because of that, we are printing notes outside and bringing them to the country.
What is the security of our monetary system? Now fake notes are being printed outside and then smuggled into India.
The Government does not have any account. The Government does not have any control. Now, the Finance Minister has just returned from the World Economic Forum. So, probably, the ground reality in India may be little away from him. He thinks that the common man is dealing in hundred rupee notes only. I do not know which is the target group before this Government and this Finance Minister. The Minister has brought this Bill with the assumption that the common man in India is dealing only in hundred-rupee notes or thousand-rupee notes. Sir, if the price of onion is going to be more than Rs. 100 per kilogram, then probably, his justification may be correct. I take it as a forecast probably that in the near future, the price of onion is going up to Rs. 100 per kilogram because he thinks that the common man only has to carry thousand-rupee note, which is not available, to buy ordinary things. Probably in the regime of this Finance Minister in the BJP Government, we can anticipate a day when the common man is going to buy onion at a price beyond Rs. 100. Is that the justification?
How is the black money being hoarded? How is the black money being handled in this country? In 1978 when the Indian economy was booming, when the Indian economy was in a take off stage also, we found it an effective remedy to stall this black money in circulation by demonetising the note. In 1978, the Act was passed after careful consideration in this House and it was prescribed as an effective remedy for containing black money in circulation. Now, the Minister says that the source of black money is not in the high denomination notes but it is elsewhere. I would request the hon. Finance Minister to please explain that `elsewhere' because we are not aware of it. For the people earning through illegal sources, it is a very safe method to keep black money in high denomination notes.
Then, there is no guarantee that the Government of India or the Reserve Bank of India is not going to print five thousand-rupee notes tomorrow and ten thousand-rupee notes day after tomorrow. As said by some friends here, the elections are nearby and we are hearing the rumours that there can be an election any day. In that kind of a situation, this Bill is very meaningful. I am not attributing any motives, but the thing is that two-rupee, five-rupee and ten-rupee notes which we are handling every day are soiled and torn notes. We are even handling pieces of the notes. We are even getting currency notes of these denomination with a lot of patchwork. If we go to a shop, we are going to handle soiled notes. The Finance Minister is not at all mindful of the soiled notes which the common man is handling in this country. People go to vegetable market and fish market and they are dealing in that kind of notes. If you go to a shop and get a torn note, you cannot say that you do not accept it. You have to take it.
The area of note printing is not getting any consideration by the Finance Minister. The fact is that no printing press attached to the Reserve Bank is working properly. The employees of the presses were on strike. I am sure that the Finance Minister is aware that the employees working in note printing presses were on strike. These presses are still not working to their optimum capacity. The only remedy he finds of all these problems is that we should print thousand-rupee notes, five thousand-rupee notes or ten-thousand rupee notes. That is giving rise to all kinds of opportunities to speculators and black money hoarders. What we did in 1978 was done with very good intentions. Moreover, the high denomination notes which are smuggled into our country are exactly the same and the common man cannot make out the difference. The common man may not be handling thousand-rupee note, but Sir, even then, if the note is in circulation, he cannot make out the difference. We are already getting the notes printed outside the country and bringing them from there. So, irrespective of whatever safety precautions are being devised by the concerned people, notes are not distinguishable. Such a kind of situation is there. There is also a report of large-scale printing of fake notes and that the fake currencies are gong to flood the market. We have seen in the past and history tells us how fake currency notes have completely crushed the economy of many countries. This happened during the World War period. I need not go into all those historical details, but the fake currency which is flushing the country and the market today is phenomenal and something beyond the imagination of all of us. Knowing that the Indian currency is sliding down, knowing that the fake currency is in circulation, he is not taking any action for containing all these things, and not taking corrective steps to make available the common man's currency, that is, two-rupee, five-rupee or ten-rupee notes.
Now, they are concerned about printing only thousand-rupee notes. This shows the priority of this Government. I am very sorry to say that there are a number of Bills before this House. We are all waiting for very important Bills which this House is supposed to discuss.
What is your priority? The Government has got the prerogative to decide which Bill should come first. You gave the priority to this High Denomination Bank Notes Amendment Bill, and the other Bills are yet to come before the Parliament. We are not sure whether they are going to come or not.
MAJOR GENERAL BHUVAN CHANDRA KHANDURI, AVSM (GARHWAL): It is the BAC which decides about the Bills that are to be taken up in the House. It is done in consultation with everybody and it is not done by us only. You are a part of that system.
SHRI P.C. CHACKO : That is not correct, Khanduri Saheb. There are four or five very important Bills about which the whole country is discussing and we have decided that they should be brought before the House. But it is the prerogative of the Government to decide as to when those Bills should be brought. You find it convenient to bring this Demonetisation Bill first leaving the other Bills behind.
PROF. P.J. KURIEN (MAVELIKARA): In BAC, we only allot time. It is for the Government to introduce those Bills and it is the Government's prerogative.
MAJOR GENERAL BHUVAN CHANDRA KHANDURI, AVSM : I am saying that when a Bill is brought before the House, the date and time are fixed in consultation, and it is not a unilateral decision.
SHRI P.C. CHACKO : In the BAC, we only decide the time and you decide about the Bills to be brought before this House. You know it very well. You find that the Cotton Ginning Act or the Demonetisation Amendment Bill is more important than the Women's Bill or the FERA Bill or the other Bills. It is the prerogative of your Government and we have nothing to say on that. Probably, this Government is having some kind of a psychological problem. I do not know what is the priority of this Government.
Today, the common man is finding it extremely difficult to even buy vegetables and the people, with great difficulty, are transacting with soiled notes. When low denomination notes are not available, it is the responsibility of a responsible Government to provide it. But I will not call this Government by using that adjective. Still, the Government is expected to do justice to the common man by printing low denomination notes. When the Government cannot do that and if this type of a Bill is brought before this House, then, I think, it needs a careful consideration of this august House.
The black money that is in circulation in this country today is three or four times more of the official currency. The amount of black money that is in circulation in this country is anybody's guess, and nobody can have any kind of definite calculation on this. In that kind of a situation, in the background of smuggling in of fake currencies and non-availability of low denomination notes, I find it really difficult to understand the intention and the purpose with which the hon. Minister has introduced this Bill. The Heavens are not going to fall if Rs. 1,000 notes are not printed tomorrow or if Rs. 5,000 notes or Rs. 10,000 notes are not available; and no common man will die of starvation. It need not be the Government's priority to print high denomination notes. We know that somebody is waiting because many of these things are done under unknown pressure. The hon. President of the BJP himself once said that the people in power may have pressures and we do not know what kind of pressures are acting on the people in power. We do not find any meaning or reason, but the people outside may be finding a good reason in this kind of a legislation. I think that it is not a priority. Its intention is not good and it is not going to help the Indian economy or is going to improve the situation as was explained by the hon. Finance Minister.
This Bill has to be withdrawn and there has to be a discussion on this because these are all things where there has to be a very serious discussion with the political parties and economists. I do not think that these type of things are taking place today. I do not think that this Government or the leadership of the Government gives any priority to discuss with people about things like how to contain the black money, how to contain the fake currency, and how to set the things right. So, the high denomination currency notes which the Government is now proposing will bring danger to our economy. That is my feeling.
While addressing the international forums, you may be under different kinds of pressures. But the Government should keep its feet on the ground, and think of the realities. The common man of this country is not expecting this august House to take a decision on printing Rs. 1,000 notes; they are waiting for something else. You are not able to give that `something else.' You are coming here with all kinds of excuses, whatever may be the reason behind that.
Sir, nobody, with any sense of responsibility, reason and love for the country and the economy, can support a legislation of this kind.
Sir, I am not making any kind of personal allegation, especially against my frined, the hon. Finance Minister. Whatever might be the circumstances under which he has brought this Bill, I consider that it would be prudent on the part of the Finance Minister to withdraw this Bill and allow things to be discussed in an impartial manner at various fora and see whether this is a neccessity and the priority of time.
Sir, with these few words, I once again would like to request the hon. Finance Minister that this Bill may be withdrawn and if the Government is going to press for it and if this Bill is going to be put to vote in this House, then I would like to say that I would oppose it.