Introduction:
Demonetization is the process of withdrawing a particular type of currency from circulation and replacing it with new currency. In 2016, the Indian government demonetized certain high-value rupee notes in an attempt to combat corruption, tax evasion, and terrorism. The decision had significant consequences for the economy and the daily lives of the population, and it has been the subject of ongoing debate and controversy. In this context, the Supreme Court of India issued a judgment on the demonetization, which upheld the government's power to take such action.
Stated Goals of Demonetization in India:
⮚ The stated goals of the demonetization in India were to combat corruption, tax evasion, and terrorism by withdrawing certain high-value rupee notes from circulation and replacing them with new currency.
⮚ For example, the government argued that the demonetization would help to uncover black money and reduce the use of undeclared or untaxed wealth. The government also claimed that the demonetization would disrupt the financing of terrorism, as terrorists often use fake or counterfeit currency to fund their activities.
Constitutional Provisions Relevant to Demonetization in India:
⮚ Article 265 of the Constitution of India states that "no tax shall be levied or collected except by the authority of law." This means that the government must have legal authority to levy any taxes or charges, including those related to demonetization.
⮚ For example, if the government were to impose a tax or fee on the exchange of demonetized currency for new currency, it would need to have legal authority to do so under Article 265.
⮚ Article 300A of the Constitution of India states that "no person shall be deprived of his property save by authority of law." This means that the government must have legal authority to seize or confiscate property, including currency.
⮚ For example, if the government were to confiscate demonetized currency from individuals or businesses without legal authority, it would be in violation of Article 300A.
⮚ Article 323A of the Constitution of India gives the central government the power to "investigate, inquire into, or audit any authority or body or person" for the purpose of promoting efficiency and accountability. This power could be relevant to the demonetization process if the government used it to investigate or audit entities or individuals related to the demonetization.
⮚ For example, if the government were to investigate a bank or financial institution for its role in the demonetization process, it could do so under the authority of Article 323A.
⮚ Article 368 of the Constitution of India gives the Parliament of India the power to amend the Constitution by a special majority. This power could be relevant if the Parliament were to pass legislation related to the demonetization process that amended the Constitution.
⮚ For example, if the Parliament were to pass a law that changed the way demonetized currency could be exchanged or used, it would be able to do so under the authority of Article 368.
Long-Term Effects of Demonetization in India:
⮚ The long-term effects of the demonetization in India are uncertain and will depend on a variety of factors, including the effectiveness of the government's policies and the broader economic and political context.
⮚ Some have argued that the demonetization contributed to a slowdown in economic growth and increased financial instability.
⮚ For example, after the demonetization, there was a decline in economic activity and job losses in certain sectors of the economy. Some experts have argued that these negative effects could have long-lasting consequences for the economy.
⮚ Others have argued that the demonetization had positive effects, such as increasing the use of digital payment methods and reducing corruption.
⮚ For example, after the demonetization, there was a surge in the use of digital payment platforms, such as mobile apps and online platforms. Some experts have argued that this shift towards digital payments could have long-term benefits for the economy, such as increased financial inclusion and reduced reliance on cash transactions. There have also been claims that the demonetization helped to reduce corruption, although these claims have been disputed by some experts.
Conclusion:
The demonetization in India had significant consequences for the economy and the daily lives of the population. The Supreme Court's judgment upheld the government's power to demonetize the notes, but it faced criticism for not holding the government more accountable for the suffering that the demonetization caused. The long-term effects of the demonetization are uncertain and will depend on a variety of factors. While some have argued that the demonetization had positive effects, such as increasing the use of digital payment methods and reducing corruption, others have argued that it contributed to a slowdown in economic growth and increased financial instability. The ultimate impact of the demonetization will depend on the effectiveness of the government's policies and the broader economic and political context.
