The government’s estimate of black money and ours was roughly the same – about Rs 3.5 lakh crores. What they miscalculated was the Indian ability for jugaad [innovation]. You had old notes trading at a discount. What was happening was redistribution among agents. I give you Rs 100, you give me Rs 60 and make a profit of Rs 40. But the Rs 100 note remains intact. It is redistribution from me to you, but not to the government.
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So what you have is a new category – perhaps it is an old category, I don’t know – of people who have black money. If you look at Jan Dhan account holders, they, technically, now have black money. They didn’t have black money earlier because they weren’t liable to pay tax. But now they have. So you have created a new category of black money holders. And this amount is not unsubstantial. We are talking of somewhere between Rs 2.5 lakh crores and Rs 3 lakh crores of such transfers happening. That means a lot of new black money holders are now in the system.
We are Indians. At the very least, you should understand your own people. If there’s one thing we are good at, it is jugaad. This was predictable, we knew dalals would come up.
Certainly, people in the financial system have played a role in it. It is difficult to tell to what extent. If you take Jan Dhan accounts, it could have happened in two ways. One is that I, as a black money holder, approach you, a Jan Dhan account holder, and say, “Here is Rs 50,000, put it into your account, and once the new notes come in, you will give me, let us say, Rs 40,000.” In other words, Rs 10,000 will be yours.
Yes, I keep your passbook. The second way of doing this is to get hold of the friendly neighbourhood banker and say, “I am giving you Rs 2 lakhs and you will deposit Rs 50,000 each into four Jan Dhan accounts.” The account holder doesn’t even know the money has been deposited in his account. At an appropriate time, the money is taken out.
It would have been impossible. Private bankers have been getting kudos from their clientele because high-value customers are protected. The anecdotal account suggests that a high-value customer would give the banker a cheque in the morning and after 5 pm, once the bank closes, the banker would call him to say, “Please take your money.” However, the people in queues would be told that the bank has exhausted its money.
That can’t happen at the branch-level bank. It would have happened at the currency-chest level. (Currency chests are select branches of scheduled banks, which are authorised by the Reserve Bank of India to stock notes and coins on its behalf.
I don’t think any such record would have been maintained… read more:
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