The Supreme Court has asked the government to submit a plan of action to cope with the hardship caused to people after 500 and 1,000 rupee banknotes – which accounted for 86 per cent of cash in circulation – were cancelled.
The top court today refused to intervene with the government’s decision to pull the old high-denomination currency, as requested by petitioners who said the shock move is poorly timed and has hit families holding marriages and farmers ahead of the harvest season.
“We will not interfere as these are economic policies of the government. However, look into ways to mitigate the sufferings of the common man,” said judges.
They also asked the government to consider raising the amount of money that can be withdrawn by people for now.
Exactly a week ago, Prime Minister Narendra Modi said that within hours of his announcement, the old notes would be illegal for transactions and must be deposited at banks before the end of the year. He said this was an urgent measure to check black money, counterfeiting and corruption.
The old notes have been replaced with refurbished 500 rupee notes and new 2,000-rupee notes, which are currently in short supply.
Banks are overflowing, for the sixth day in a row, with customers waiting to get the new currency. To ease the inconvenience, the government yesterday tweaked the limits on withdrawals and exchanges. So a person can now swap Rs. 4,500 worth of old notes for new ones every day. Rs. 24,000 can be withdrawn from accounts every week. ATMs can be used to pull out RS 2,500 per day per card.
The government today said that inedible ink will be used at banks to ensure that people do not bust the quota of new notes assigned to each individual.
Officials said this would prevent “unscrupulous persons” from sending people from one bank branch to the next to exchange old notes, which means the same people keep reappearing in the long lines, while others never get a chance to collect the new cash.Nearly 45 billion dollars have been deposited so far in bank accounts.
The sudden move, while praised as a big reform, has caused huge disruption to daily life, especially for poor people who live in the cash economy.
