The government has filed an affidavit in the Supreme Court detailing the reasons for undertaking demonetisation.
Here are the salient points from the affidavit, as reported by Live Law:
* A high-level committee is monitoring the situation on a day-to-day basis and appropriate decisions were being taken to ensure that no one suffered due to the move.
* The measure would stamp out black money and fake notes being pumped in by Pakistan and help the poor and middle class.
* It would put the economy on a high growth path that would create more jobs and make housing in urban areas affordable to the poor.
* An estimated 22.4 lakh pieces of fake Rs 1,000 notes were in circulation in 2014-15 while the number of counterfeit Rs 500 notes was around 37.5 lakh.
* Adopted a “multi-pronged and calibrated approach“ to eradicate black money and promote cashless transactions and demonetisation is a step in that direction.
* The withdrawal of existing high denomination bank notes will curb funding of terrorists. It will eliminate black money which casts long shadow of the parallel economy on our real economy. It will help reduce tax avoidance and bring more transactions into the formal economy. Trans-border terrorism, Left-wing extremism and domestic terrorism are being funded by black money. High denomination notes have been misused by terrorists and are known to facilitate generation and hoarding of black money.
* Hostile intelligence agencies have not only been pumping in huge amount of fake Indian notes to finance terrorist groups and their operations in the country but also printing fake currency in large number to destabilise the nation.
* The exercise of replacement of old notes by way of exchange and deposit is being carried out on a large scale and involves 1.30 lakh bank branches, 1.5 lakh post offices, one lakh banking correspondents and 2.01 lakh ATMs. Further there are 14,43,595 points of sale (POS) which are online and the total number of outstanding cards is 2,59,43,784
* There is excessive use of cash in the real estate sector due to large cash transactions in purchase of land and housing property. The real estate prices get pushed up artificially. This reduces the availability of affordable housing for the poor and the middle class. Greater over the board transactions will lead to a decline in real estate prices making housing affordable to all.
* A thrust has been made for increasing the digital payments in the economy through credit and debit cards, internet banking, mobile apps and e-wallets. In the last ten days there has been a nearly 300 percent jump in the number of transactions that have taken place by the use of cards alone.
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