Skip to main content

Govt of India refusal to give black money reports on demonetization "violates" RTI Act

By Our Representative
Obtaining the Reserve Bank of India (RBI) board of directors minutes “approving” the demonetization decision of the Government of India (GoI) 28 months after he made a Right to Information (RTI) plea, senior RTI activist Venkatesh Nayak regrets, these do not have any mention of “the black money reports submitted by the National Institute of Public Finance and Policy (NIPFP, an autonomous research institute under India's Ministry of Finance) and two other research institutions.”
Pointing out that the GoI has also refused to hand over the black money reports despite his “formal request” under RTI, Nayak says, the RBI minutes, interestingly, argue that “most of the black money is not held as cash but in the form of real-sector assets such as gold or real estate and that demonetization would not have any material impact on those assets.”
This was in reply to the GoI argument that the shadow economy for India (where black money transactions do not leave an audit trail) was estimated at 20.7% of GDP in 1999 and had risen to 23.2% in 2007 (based on World bank estimates).
Criticizing the Union Finance Minister making a “curious statement” in Parliament that the black money study reports may be made available to MPs, but will not be placed in the public domain, Nayak says, this violates RTI Act.
According to him, “The government seems to have ignored the proviso underlying Section 8(1) of the RTI Act which contains the noble democratic principle that information which cannot be denied to Parliament or State Legislature cannot be denied to a citizen. To hold that information may be provided to certain MPs but not to the people who sent them to Parliament is perplexing to say the least.”
While “The Indian Express” reported on November 8, 2018, quoting the minutes, that the RBI board rejected the GoI argument in favour of demonetization,that it was meant to fight black money, the minutes were never made public. Received last week, these were sent to Nayak following RTI watchdog Central Information Commission (CIC) issuing a penalty show cause notice to a GoI official for “inordinate delay” in the matter.
Ironically, the RBI board’s 561st meeting, show the minutes, was held less than five hours before Prime Minister Narendra Modi announced the controversial decision on television, though the RBI sent its resolution approving to GoI on December 16, a full 38 days after the Rs 500 and Rs 1,000 notes were banned on November 6, 2016.
Claiming that suggests “RBI's Board had only rubber stamped the Government's initiative”, Nayak, who is with the Commonwealth Human Rights Initiative (CHRI), says, the minutes show the board also rejected the GoI argument in favour of noteban which stated that growth of the bank notes of Rs 500 and Rs 1,000 denomination was 76.38% and 108.98% during the period 2011-16 whereas the economy had grown only by 30%.
“RBI's directors disagreed with this reasoning and responded that the growth rate of the economy was the real rate whereas growth in currency circulation was nominal and when adjusted for inflation did not constitute any stark difference”, Nayak says, citing the minutes.
He adds, the RBI directors also “rejected the Government's concern that an estimated Rs. 400 crores of counterfeit currency in circulation was significant as a percentage of the total quantum of currency in circulation”, noting the noteban would “ impact negatively on the GDP in the short term.”
According to Nayak, the RBI minutes are “strangely silent” on “what were the compelling factors that justified demonetization which took the lives of more than a hundred citizens who stood outside banks to exchange their currency notes and scores of bankers who collapsed counting them and have had well documented negative impact on various sectors of the economy.”
He continues, “At para #4.3(i), it is mentioned that the Board found the measure commendable, but there is no reasoning provided for this commendation anywhere in the minutes. At para #4.4 there is a vague mention that demonetization will help achieve financial inclusion. How will criminalising possession of the DeMon currency beyond the grace period, lead to financial inclusion is not explained anywhere.”
Nayak adds, “What is interesting is that the minutes do not contain any sensitive information such as factors, data or exchange of opinion about financial and economic security. Nothing in the documents that I have received indicates that any portion of it has been severed under Section 10 of the RTI Act to remove sensitive information.”
Commenting on the board argument that would help incentivise use of electronic modes for making payments instead of cash, Nayak says, “Opinion on whether increased use of electronic modes of payment was due to DeMon is divided. RBI's own recent reports present a contradictory picture. While e-transactions have grown manifold there is more cash circulating in the economy than there was on the date of demonetisation.”
“Interestingly”, says Nayak, while the minutes claim, “a deputy governor of RBI was “working with the Central Government on the initiative to withdraw legal tender of the Rs 500 and Rs1,000 currency notes, for six months, his name is not mentioned anywhere in the minutes.”

Comments

TRENDING

Amit Shah 'wrong': Lack of transparency characterized bank frauds, NPAs, jobs data

Counterview Desk
India's senior RTI activists Nikhil Dey, Anjali Bhardwaj, Venktesh Nayak, Rakesh Reddy Dubbudu, Dr. Shaikh Ghulam Rasool, Pankti Jog and Pradip Pradhan, who are attached with the National Campaign for Peoples' Right to Information (NCPRI), have said that Union home minister Amit Shah's claim that the Government of India is committed to transparency stands in sharp contrast to its actual actions.

Untold story of Jammu: Business 'down', students fear lynching, teachers can't speak

By Rajiv Shah
A just-released report, seeking to debunk the view that people in Jammu, the second biggest city of Jammu and Kashmir (J&K) after Srinagar, people had gone “out celebrating” abrogation of Article 370 which took away the state’s special status, has reported what it calls “abominably high levels of fear” across all sections in the town.

Gujarat's incomplete canals: Narmada dam filled up, yet benefits 'won't reach' farmers

By Our Representative
Even as the Gujarat government is making all out efforts to fill up the Sardar Sarovar dam on Narmada river up to the full reservoir level (FRL), a senior farmer rights leader has said the huge reservoir, as of today, remains a “mirage for the farmers of Gujarat”.
In a statement, Sagar Rabari of the Khedut Ekta Manch (KEM), has said that though the dam’s reservoir is being filled up, the canal network remains complete. Quoting latest government figures, he says, meanwhile, the command area of the dam has been reduced from 18,45,000 hectares (ha) to 17,92,000 ha.
“According to the website of the Sardar Sarovar Narmada Nigam Ltd, which was last updated on Friday, while the main canal, of 458 km long, has been completed, 144 km of ranch canals out of the proposed length of 2731 km remain incomplete.
Then, as against the targeted 4,569 km distributaries, 4,347 km have been constructed, suggesting work for 222 km is still pending. And of the 15,670 km of minor canal…

Kashmiris in a civil disobedience mode, are going against 'diktat' to open shops

Counterview Desk
A team of concerned citizens, including Ludhiana-based psychiatrist and writer Anirudh Kala, Mumbai-based activist and public health professional Brinelle Dsouza, Delhi-based journalist and writer Revati Laul, and social activist Shabnam Hashmi, travelled to Kashmir and Jammu to understand the impact of the abrogation of Article 370 and the subsequent security clampdown and communication blockade on the lives of the people of Jammu and Kashmir (J&K).

Ceramic worker dies: 20,000 workers in Thangadh, Gujarat, 'risk' deadly silicosis

By Our Representative
Even as the country was busy preparing for the Janmashtami festival on Saturday, Hareshbhai, a 46-year-old ceramic worker from suffering from the fatal lung disease silicosis, passed away. He worked in a ceramic unit in Thangadh in Surendranagar district of Gujarat from 2000 to 2016.
Hareshbhai was diagnosed with the disease by the GCS Medical College, Naroda Road, Ahmedabad in 2014. He was found to be suffering from progressive massive fibrosis. He is left behind by his wife Rekha sister and two sons Deepak (18) and Umesh (12),
The death of Hareshbhai, says Jagdish Patel of the health rights group Peoples Training and Research Centre (PTRC), suggests that silicosis, an occupational disease, can be prevented but not cured, and the Factory Act has sufficient provisions to prevent this.
According to Patel, the pottery industry in the industrial town of Thangadh has evolved for a long time and locals as well as migrant workers are employed here. There are abou…

Cess for Gujarat construction workers: Spending less than 10%; no 'direct help' to beneficiaries

By Our Representative
While the Gujarat government’s Building and Other Construction Workers Welfare Board, set up in 2004, as of March 31, 2019, has collected a total cess of Rs 2,097.62 crore from the the builders, it has spent less than 10% -- Rs 197.17 crore. And, as on May 31, 2019, the total cess collection has reached Rs 2,583.16 crore, said a statement issued by Bandhkam Majur Sagathan general secretary Vipul Pandya.
Pointing out that just about 6.5 lakh out of 20 lakh workers have been registered under the board, Pandya said, vis-à-vis other states, Gujarat ranks No 13th in the amount spent on the welfare of the construction workers, while 11th in the amount collected.
And while the builders are obliged to pay just about 1% of the total cost of their project, the calculation of the cess is flawed: It is Rs 3,000 per square yard; accordingly, Rs 30 per square yard is collected. “Had the cess been collected on the real construction cost, it would have been at least Rs 7,000 cr…

Success of 'political' Hinduism: Kashmiris being depicted as antagonists of rest of India

By Anand K Sahay*
There are times in history when facts call attention to themselves; they assert their independence in all its amplitude and are in no need of the crutch of interpretation. Such a moment is visible in Kashmir now. Merely by being on the table, the facts there taunt the regime’s proclamations.