Chanakya IAS Academy: 11/09/16

Wednesday 9 November 2016

Midnight stroke: Rs.500, Rs.1000 notes withdrawn as legal tender

Intro: In a move that has rattled the nation, Prime Minister Narendra Modi on Tuesday abolished Rs 500 and Rs 1,000 notes effective midnight. The move, aimed at tackling fake notes and the black money economy, is expected to have a huge impact on the economy, equivalent to a substantial withdrawal of money or a significant hike in the interest rates. He expressed confidence that the staff of banks and post offices will rise to the occasion to introduce the new order within the available time. The Indian government had done something similar in 1978 when it demonetized Rs 1,000, Rs 5,000 and Rs 10,000 notes.

Points to be noted:

Currency notes of Rs 500 and Rs 1000 denominations will not be legal beginning November 9
New notes of Rs 500 and Rs 2,000 would be released and circulated from November 10
ATMs will not work on November 9, and at some places on November 10 as well
People can deposit notes of Rs 1000 and Rs 500 in their banks from November 10 till December 30, 2016
Those unable to deposit Rs 1000, Rs 500 notes by December 30 for some reason, can change them till March 31, 2017 by furnishing ID proof
Currency notes of Rs 1000 and Rs 500 will be just paper with no value
Banks will remain closed on 9th November
All banks and post offices will remain shut tomorrow
Cashless fund transfer won't be affected by this
Respite for people for the initial 72 hours, Govt hospitals will accept old Rs 500 and 1000 notes till 11 November midnight
Some medical facilities will be exempted from this for the time being
Rs 20,000 weekly cap on exchange of Rs 500 & Rs 1,000 notes.

Why this decision taken:

Fake currencies circulation have grown over the years.launching new currency notes with new designs from November 10. Introducing 200 rupee note with Mangalyan logo.
It is a bold move. Counterfeit currencies are being used for financing terrorism. Our security measures have not been breached,. This is a powerful measure to combat terrorism. Govt. has taken many measures in last two years. This will go a long way. Fake currencies corrode economy
Economy grew by 30 per cent between 2011 and 2016 and currency notes in circulation rose by 40 per cent. In contrast, the circulation of ₹500 currency notes grew by 76 per cent and ₹1,000 notes by 109 per cent. The RBI Governor said that despite the high number of fake currency, the security features of the currency have not been breached. “The RBI has ramped up production of the new series of notes,”.

Scrapping Rs.500, Rs.1000 notes a costly idea:

large denomination notes are highly likely to be used for illegal activities and not so much as a medium of ordinary transaction, and elimination of such notes can go a long way in cutting the stocks of such funds (popularly known as black money in India).
The reasons cited were similar—that such notes are too large to be used widely in day-to-day transactions, and instead end up serving the purposes of terrorists, tax evaders, money launderers and other criminals.
what they fail to take into consideration is the cost of scrapping these high-value notes. According to data put out by the Reserve Bank of India (RBI), the share of Rs.1,000 notes in the stock of currency in circulation at the end of financial year 2014-15 was a whopping 39%, with Rs.500 notes accounting for a further 45% of currency stock.
cost of printing a Rs.10 note was Rs.0.96 (according to the data), or 9.6% of face value. The cost of printing a Rs.1,000 note (Rs.3.17), on the other hand, was only 0.32% of the face value.
In other words, for a given amount of money, it costs the RBI 30% less to print it in the form of Rs.1,000 notes than in Rs.10 notes.

Whip for whom:

This will disappoint those who hope that eliminating high-value notes would prompt awkward conversations between criminals and the authorities. There is political resistance too; some worry that abolishing high-value notes is a step on the road to abolishing paper money altogether. And, without coordinated withdrawal of all high-value notes, the move would be much less effective.”

Suggestions and conclusion:

Given the current demand for high-denomination notes, it will be expensive to get rid of them. The effort should thus be to first curb the demand for these notes, and there is no better way than to encourage electronic payments and move towards a cashless economy.
IMPS (Immediate Payment Service) has already seen significant traction in peer-to-peer transfers. With the proposed Universal Payments Interface (UPI) coming into force later this year , there will be further incentive to avoid the use of cash.
Widespread use of cash comes at a significant cost to the economy—not only does it encourage greater use of unaccounted fund, there is also a significant cost borne by the RBI for printing, authenticating, maintaining and distributing currency. In this context, there is a strong case for RBI or the government to provide people monetary incentives in order to encourage the adoption of electronic payments.

Debating freedom of press and expression

Chanakya IAS Acaemy

Paper: II

Topic: Indian polity, Constitution, Freedom of expression, Supreme court.

Relevance and use of the article in UPSC prelims and mains examination:Dear aspirants this article is about the recent decision of the central government to ban NDTV India has raised concerns regarding the rights of free press in India. Mostly, people are using the ‘freedom of speech & expression’ interchangeably with the rights of a free press. But are both one and the same?The constitution of India guarantees freedom of speech and expression to all its citizens under Article 19, which deals with protection of certain rights regarding freedom of speech, etc.Let's go through the article and find out the viability of recent decision.

Introduction:

Clause (1) (a) of Article 19 states, “All citizens shall have the right to freedom of speech and expression.”However, the Indian news press enjoys the freedom to engage in the business of disseminating news to audience under the right to carry out any profession, occupation, trade, industry or business, guaranteed under Article 19(1) (g).
Complications arise when Article 19(1) (a) and (g) are read to be one and the same and even the oversight and restrictions in the interest of the 'general public' contemplated under Article 19(6) are ignored because of this obfuscation.

Role of media:

Entities such as NDTV engaged in the business of news/media are a prime source of information, helping people to cultivate opinions on the political, economic and social situation in the country. The traditional print media still retains influence and television is widely popular, but public opinion, especially of the youth, can be gauged through social networking platforms and the so-called 'new media'.
In this way, the media continues its role as a kind of non-formal educator, helping citizens to make judgments, often by presenting views which are contrary to those of the government.

Governments stand:

This vaunted position occupied by the media, including surveying the judiciary, executive and legislature alike, does not come without implicit responsibilities. Hence, the restrictions on the business of news/media under Article 19(6), when deemed necessary to ensure an effective protection of the rights of common citizens under Article 19(1) (a).
Though this is being cited as the first incident where the government has censored the media in the interest of national security, recent history is rife with examples of the government curtailing media freedom to protect the general public interest.
Far from regulation of media by the government, at present, the Indian media industry is a largely self-regulated consortium. The informal nature of this self-regulatory mechanism only adds to the risk of an unregulated vital sector such as media falling prey to priorities and practices which could be contrary to public interest or as well be a threat to national security.

Media Regulation Bill: A much needed regulation

The call of the hour is a composite code/piece of legislation in the media business space, one that will protect the freedom of press under such law but will also prevent media sector from impinging on the freedoms and rights of citizens of India and acting against public interest or national security in any manner.
A draft bill on media regulation called the Maintenance Of Transparency and Code of Conduct and Prevention of Circulation, Publication or Broadcasting of Misleading Information by any Entity engaged in Circulation, Publication or Broadcasting of News. by this bill an attempt was made to strike a balance between self regulation and a statutory oversight wherever and whenever such self regulation fails to protect the interests of the citizens of India, public interest and national security.
While endorsing and encouraging self regulation in the media space compulsorily, the bill suggests the establishment of an authority governed by a board comprising a retired high court judge and two members, i.e. a joint secretary and an eminent person. Most important of all, the bill suggests that no serving editors be on the board.
The bill provides the board with the power to take suo motu action as well as the power to impose a penalty for code of conduct violations as well as the violation of transparency disclosure norms, thus strengthening the existing self-regulatory mechanism.

It further suggests the establishment of an appellate authority headed by a retired supreme court judge, a former secretary in the government of India and another member, all of whom can be removed from their posts for specified reasons only after an enquiry by the SC.

Much needed freedom of press:

The necessity of a free press to democracy is incontrovertible and enshrined in law and constitution in the India. The quality of that freedom, however, requires to be cautiously guarded so as to not infringe upon citizens rights, public interest or national security.
Freedom has many components and is rarely absolute or paramount in a democracy, if only, because democracy may itself be thought of as a system for reconciling competing freedoms. The press wields a unique power of impacting public opinion and plays a vital role in democracy. This power, however, must be exercised in tandem with other democratic values. Chief amongst these is the stipulation that press freedom promotes, and operates within, the rule of law which itself is often described as the cornerstone of a democratic society.

Conclusion:

In a modern democracy that abides by the rule of law, press freedom can never mean a press which sits outside, above and beyond, or in disregard of, the law. Respect for the law is the common framework within which the press, as an important commercial sector, is enabled to flourish, to preserve and enjoy its freedoms, and to make its unique contribution to a democratic society.
The rule of law, in other words, seeks to also ‘guard the guardians’ and self regulation in the media space needs to ensure that media entities are mindful of their duty to be on the right side of the rule of law.

Question:

“The necessity of a free press to democracy is incontrovertible and enshrined in law and constitution in the India. The quality of that freedom, however, requires to be cautiously guarded so as to not infringe upon citizens rights, public interest or national security.” Comment.

Suggested points:

Discuss about the current decision of government about banning a News channel.
Constitutional provisions about freedom of speech and expression.
Differentiate between the constitutional provisions for press and common public.
Role of regulation rather than banning.
Media Regulation Bili and its importance with provisions.
Role of government, and media to form a good mind set of information for general pibic.
Suggestions and conclusion.

Link:http://www.thehindu.com/opinion/lead/ndtv-india-ban-its-not-about-just-national-security/article9316080.ece