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'When people are suffering, how can you call it a good cause?' -- C H Venkatachalam, GS, AIBEA

An interesting interview with CH Venkatachalam, General Secretary of All India Bank Employee Association (AIBEA) on the issue of Demonetisation. Though a couple of days old, this could not have been missed. He says in a response to a question:

What do you think is the rationale behind bringing in a denomination higher than Rs 1,000?

It is illogical. Removing Rs 500 and Rs 1,000 notes and bringing in Rs 2,000 notes does not make sense at all. It is easier to hoard again.

Black money transactions are always done in higher denomination. Now, people will accumulate the Rs 2,000 notes.

Why do you have to come out with a Rs 2,000 note when you are demonetising higher currencies?....

What is really the interesting pat here is the absence of mentioning purchasing power of the Rupee if higher denominations were junked. It should be noted that the purchasing power of the rupee had gone down considerably since 1978, when high value notes were junked. The value of Rs 1,000 in 1998, compared to the movement of the Consumer Price Index (CPI) taking 1982 as the base year, was only Rs 160. This meant the average consumer now needed notes of a higher face value for normal cash transactions. This and taking into account the fact that other methods of payment were yet to take root was why the government had, in the public interest, re-introduced the Rs 1,000 note during the AB Vajpayee regime. Maybe, the same logic has been applied here in releasing INR 2000 currency note.

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