After the demonetisation, last week saw a succession of raids across the country by various government agencies in an effort to unearth black money. But the results so far are unlikely to enthuse the authorities. The swoops have brought about Rs 242 crores, going by one official estimate. Another estimate is nearer Rs 200 crores. But since the process is still on, these figures could rise. The point, however, is that these are paltry sums in the broad landscape of demonetisation. The official data shows that around 90 per cent of the nearly Rs 14 lakh crore demonetised notes have already been returned to the banking system. This begs the question: what was the point of demonetisation?
The money seized in the raids is almost entirely made up of the new Rs 2,000 notes. This suggests that the hoarders sent their old notes to banks and were able to exchange them for Rs 2,000 notes in collusion with bank personnel, who obviously took a cut. These dubious exchanges also raise a question mark over the wisdom of banning Rs 1,000 notes but printing those of the higher value of Rs 2,000. Does the system have enough personnel and computing capabilities to track down and punish hoarders who used the banking system for their ends, even if the overall amounts unearthed in raids is very modest?
