How the RBI Dodged RTI Appeals For Minutes Of Meeting On Demonetisation.

After two years of stubborn refusal to part with any details regarding the minutes of its board meeting on demonetisation, the RBI has demonstrated its sheer disdain for the RTI Act. While India’s leaders make a mockery of the constitution and the economy, the Reserve Bank of India made a mockery of the Right to Information Act. Why should the RBI, which is supposed to be an independent financial regulator, suppress its minutes on demonetisation, illegally deny them under the RTI Act and then leak it to the media at a time convenient to them? When a citizen sought the minutes of the RBI meeting on demonetisation, the public information officer (PIO) denied the information citing arbitrary reasons. Even after a journalist accessed the minutes and reported on it in November 2018, the PIO didn’t relent and refused to release the information to the RTI requestor.

The citizen was made to wait until a second appeal was listed before a new central information commissioner in February 2019, where, again, the officials refused to part with the copies of minutes. The PIO pleaded to national security reasons under 8(1)(a) for denial.

The Central Information Commission (CIC) rebuked the RBI, on February 18, for “perfunctory handling” of an RTI application and sought records of its board meetings where the issue of demonetisation was deliberated upon and issued a show-cause notice to its central public information officer (CPIO). Only then did the CPIO of the RBI release the minutes of the meeting after withholding it for two years. Activist Venkatesh Nayak of the Commonwealth Human Rights Initiative (CHRI) had sought records of all the meetings of the RBI’s central board of directors along with the papers, presentations and other documents placed before it, which resulted in the decision to implement demonetisation on November 8, 2016, by Prime Minister Narendra Modi.

As usual, the RBI refused to give any information and cited the exemption clause from section 8 (1) (a) of the RTI Act. The section exempts from disclosure any information which would prejudicially affect the sovereignty and integrity of India and the security, strategic, scientific or economic interests of the state with relation to any foreign state or lead to the incitement of any offence. Nayak then approached the CIC. During the hearing before the CIC in February 2019, the RBI’s representative accepted that the information “prima facie was wrongly denied.” Venkatesh had sought information on two points: First: The copies of the minutes of the meeting of the RBI’s Board of Governors and any recommendation that was submitted regarding the demonetisation exercise to the central government.

The copy was sent after two years, after the CIC pulled it up. Nayak said that the RBI’s board had “essentially only rubber-stamped the government’s initiative.” Nayak’s second point pertains to petitions, recommendations or any communication submitted by any person, entity or organisation to the RBI regarding demonetisation and all the replies that the RBI had sent to such entities in addition to seeking copies of all the file notings and correspondence in this regard. The CPIO quoted Sec 7(9) to deny this information, ignoring that it is not an exception but facilitation to give information. First, they used section 8(1)(a) and then section 7(9) of the RTI Act to deny the information. Hardly any information can be called “sensitive” when the minutes of the demonetisation meeting is concerned. The investigation In an investigative report the Indian

Express, after accessing the minutes of the RBI board meeting, which was held hurriedly at 5:30 pm on November 8, 2016, stated that minutes revealed that the board had warned the government of its adverse effects in the short term. The report by Ritu Sarin also said that the board did not agree with the government’s justification that demonetisation would extinguish black money and counterfeit notes. The prime minister had repeatedly cited these two grounds as the key objectives of demonetisation in various meetings and in his address to the nation.

Another media report from the National Herald stated that the timing of the report, barely 10 days before the RBI Board met again to discuss the government’s proposal that called on the RBI to dip into its reserves and transfer an amount, speculated to be in the range of one to three lakh crore of rupees, to the government for public spending before the election, is significant. The National Herald asked, “Is the ‘leak’ of the two-year-old minutes of the meeting meant to reassure people that the central banker remains prudent and would once again place on record its reservations and allow the Government to bite the bullet? Or is it meant as a message to the government that more ‘leaks’ of the government’s intent, proposals etc. could be embarrassing in an election year?” This report further said that “the disclosure of the two-year-old minutes of the board meeting, something that the RBI had steadfastly refused to share till now, is clearly designed to salvage the reputation of the central banker and the RBI governor Urjit Patel, who had been accused of meekly succumbing to the government.”

The minutes also reveal that the RBI was aware of the adverse impact the move would have on growth, GDP, the medicare sector, tourism and the informal economy. It also reveals that the RBI Board had warned the government, in writing, which no one cared to consider. RBI cautions against the negative impact on GDP The minutes of the 561st meeting of the RBI’s central board, which was convened hurriedly in New Delhi at 5.30 pm on 8 November 2016, revealed that the central bank’s directors described the move as “commendable” but also warned that demonetisation “will have a short-term negative effect on the GDP for the current year.” Analysing these minutes, the Indian Express reported that, in less than four hours before Prime Minister Narendra Modi announced demonetisation on November 8, 2016, the central board of the RBI gave its approval to the scheme but also rejected, in writing, two of the key justifications for the move — elimination of black money and counterfeit notes. These minutes were signed by the then RBI governor Urjit Patel on December 15, 2016, five weeks after the meeting was held.

The RBI board also recorded six objections, which were described as “significant observations”. The RBI directors, after receiving a proposal draft of the scheme from the Ministry of Finance on November 7, 2016, argued that the government’s reasoning, that the withdrawal of HD (high denomination) currency notes of Rs 1,000 and Rs 500 would help in curbing black money and restrict circulation of counterfeit cash, did not really hold up. Most of the black money is in real estate Referring to the pretext that demonetisation would curb the flow of black money, the minutes recorded the facts and figures given in the government’s white paper on black money and noted, “Most of the black money is held not in the form of cash but in the form of real sector assets such as gold or real-estate and… this move would not have a material impact on those assets.” Regarding fake currency, the ministry informed the board that counterfeiting is on the rise in denominations of Rs 1,000 and Rs 500, and the total quantity of fake currency is estimated to be around Rs 400 crore.

The RBI Board further explained that “while any incidence of counterfeiting is a concern, Rs 400 crore as a percentage of the total quantum of currency in circulation in the country is not very significant”. Among the other objections, the board recorded that the growth of the Indian economy and its linkage to the high amount of HD currency in circulation, as pointed out in the government’s proposal, was flawed since the rate of inflation had not been taken into consideration. The minutes also pointed out that “the growth rate of economy mentioned is the real rate while the growth in currency in circulation is nominal. Adjusted for inflation, the difference may not be so stark. Hence, this argument does not adequately support the recommendation…” and warned of a negative impact, saying “the withdrawal of HD currency notes would have a negative impact on two sectors in particular: medical and tourism.”

It suggested that private medical stores should also be included in the exemption list. Describing the problems that incoming tourists would encounter, the RBI directors pointed out that, “arriving domestic long distance travelers who may be only carrying high denomination notes will be taken by surprise at railway stations/airports for payment to taxi drivers and porter charges and hence put to hardship. It would also have an adverse effect on tourists.” The RBI governor, however, saw a positive feature. He said: “the proposed step also presents a big opportunity to take the process of financial inclusion and incentivising use of electronic modes of payment forward as people can see the benefits of bank accounts and electronic means of payment over the use of cash…” Finally, the RBI agreed with the withdrawal of banknotes of Rs 1,000 and Rs 500, with some assurances.

“The board was assured that the government would take mitigating measures to contain the use of cash… the board considered the memorandum and after detailed deliberations concluded that in the larger public interest, the balance of advantage would lie in the withdrawal of legal tender status of Rs 500 and Rs 1,000 currency notes currently in circulation…” Black money reports not for the public The Union finance minister recently stated in parliament that black money study reports may be made available to MPs who sit on the Department-related Parliamentary Committee on Finance but they would not be placed in the public domain. The government ignored the proviso underlying Section 8(1) of the RTI Act that information which cannot be denied to the parliament or state legislatures cannot be denied to a citizen. Who will be liable for the lives of more than a hundred citizens that were lost in queues outside banks to exchange their hard-earned money? M. Sridhar Acharyulu is a former Central Information Commissioner and a professor of media law at Bennett University. This article was first published here


PM Narendra Modi credits demonetisation for making homes affordable to youth

 Prime Minister Narendra Modi on Wednesday credited his government’s demonetisation decision for bringing down prices of houses and making them affordable for the aspiring youth

He also said that if the previous governments had to do the work that he has done so far, they would have needed “25 more years” for it

The prime minister was addressing a gathering after laying the foundation stone for extension of the new terminal at Surat airport in Gujarat

“I was asked what has been the benefit of note ban decision. You should ask it to the youth, who could buy residential homes at affordable rates after the decision. Black money used to be parked in real estate sector, but with decisions like note ban and RERA, we put a check to it,” Modi said

He lauded the Civil Aviation Ministry’s ‘Udaan’ (Ude Desh Ka Aam Nagrik) scheme – a regional connectivity scheme that makes flying affordable for masses, saying it will boost development of the country’s aviation sector

The prime minister also said that during the last four years of NDA rule, his government constructed 1.30 crore houses while during the previous UPA rule, 25 lakh houses were built

He also stated that for the last 30 years, the country had a “hung Parliament” due to which progress was affected. “But four years ago, people voted to give full majority after which the country is progressing rapidly,” he said.

PIL seeks to quash TN govt order on bus fare hike

 A public interest litigation (PIL) has been filed in the Madras High Court, seeking to quash an order of the Tamil Nadu government, hiking the bus fares from January 20.

The petition, filed by one V Munikrishnan, is likely to come up for hearing tomorrow.

Munikrishnan submitted that he came to know through the print and visual media that the state government has hiked the bus fares from January 20, citing various reasons like increase in diesel prices, spare parts, maintenance and salaries.

He said, as per statistics, 80 per cent of the people use buse for travelling, particularly the poor and middle class as it was more affordable compared to other modes of transport.

The petitioner alleged that the state government has been spending huge amounts of public money for achieving their political goals and shifting the burden on public by saying that there is a financial crisis in the transport department.

The sudden and steep fare hike had put people to irreparable hardship, Munikrishnan said, adding that those dependent on the bus services were now forced to spend 25 per cent of their salary as transport expenses.

When people were already suffering due to the Goods and Services Tax (GST), demonetisation and price hike in other basic necessities, the state government has hiked the bus fare against the welfare of the public, he added.

Petitioner’s counsel R Y George Williams made a mention before a division bench, comprising Justices R Subbiah and T Ravindran, that he be permitted to file a petition against the bus fare hike and the matter be heard early.

Granting permission, the bench said the matter would be heard tomorrow.

On January 19, the Tamil Nadu government hiked fares of buses under the state-run transport corporations and private entities by about 20 to 54.54 per cent.

The new fares came into effect from January 20.

The government also announced a fund for accident compensation and prevention, besides a panel to go into the restructuring of bus fares in the future.

It cited factors for the hike, including increase in fuel price and maintenance, annual increment in salaries, pension and purchase of the new buses to increase efficiency.

A recent interim direction of the Madras High Court in a transport-related petition was also cited to support the decision to effect a hike in fares.

Workers of the Tamil Nadu State Transport Corporation owing allegiance to 17 trade unions, including those affiliated to the DMK and Left parties, had gone on strike on January 4 after failure of talks with the government on wage revision.

While the unions wanted a 2.57 times hike, the government offered only 2.44, resulting in a stalemate.

The strike severely crippled public sector bus services, causing immense hardship to the public, including office-goers in the cities though the government tried to maintain the services by roping in temporary drivers and private buses.

The AIADMK-backed union, besides some others, had not participated in the protests.

The unions had called off the strike on January 11 after the Madras High Court appointed an arbitrator to settle their wage dispute with the government.

Source : PTI

Indian economy on ‘very solid track’: IMF chief Christine Lagarde

Days after the International Monetary Fund lowered its growth forecast for the current and the next year, IMF chief Christine Lagarde today said the Indian economy is on a “very solid track” in the mid-term.

“Turning to India…we have slightly downgraded India; but we believe that India is for the medium and long-term on a growth track that is much more solid as a result of the structural reforms that have been conducted in India in the last couple of years,” the IMF Managing Director Lagarde said.

Describing the two major recent reforms in India – demonetisation and Goods and Services Tax (GST) – as a monumental effort, Lagarde said it is hardly surprising that there “is a little bit of a short-term slowdown” as a result.

“But for the medium term, we see a very solid track ahead for the Indian economy,” she said to a question on India.

“We very much hope that the combination of fiscal, because the deficit has been reduced, inflation has been down significantly, and the structural reforms will actually deliver the jobs that the Indian population, particularly the young Indian people expect in the future,” Lagarde said.

Source : PTI

‘Rs 5,400 cr worth of undisclosed income detected’

'Rs 5,400 cr worth of undisclosed income detected'
‘Rs 5,400 cr worth of undisclosed income detected’

A whopping Rs 5,400 crore worth of “undisclosed income” has been detected by law-enforcing agencies till January 10 since demonetisation came into force last November, the government has told the Supreme Court.

It also made references to “various malpractices” which came to fore post demonetisation, including the use of old currency notes for buying gold.

Giving details about the raids and recoveries by the law -enforcing agencies, it said that after the demonetisation period of November 9 to December 30, 2016, the Income Tax department had initiated “Operation Clean Money” on January 31 to leverage technology and data analysis for e-verification of the cash deposits made during that period.

The Ministry of Finance in an affidavit said that between November 9, 2016 and January 10, 2017 alone, there were more than 1,100 raids/surveys conducted by Income Tax Department on various persons.

During this period, over 5,100 notices were issued for verification of “high value suspicious cash deposits made in bank accounts”, it said.

“As a result of the raids and other strict measures enforced, more than Rs 610 crore in cash (including cash of Rs 513 crore out of which Rs 110 crore was in new currency) and valuables were seized by the IT Department and other government agencies.

“The undisclosed income detected in the above actions was more than Rs 5,400 crore,” the affidavit said.

It said that out of 1,100 raids and surveys, more than 400 cases were referred to the Enforcement Directorate and the CBI for further action in accordance with law.

“The exercises have resulted in the identification of approximately 18 lakh persons for such online verification, who appeared to be not in line with tax-payers’ profile. At present, more than 12 lakh online responses from 8.38 lakh distinct PANs/persons have already been received.

“It is submitted that in case there has been due explanation, the verifications are being closed after proper analysis and examination. Similarly, where there have been deposits made in Pradhan Mantri Garib Kalyan Yojna (PMGKY), then also the verifications are being closed.

“It is further submitted more than 3.78 lakh out of the approximately 18 lakh high-risk cases have been detected and taken up for assessment and investigation,” it said.

( Source – PTI )

Court dismisses banker’s anticipatory bail plea

Court dismisses banker's anticipatory bail plea
Court dismisses banker’s anticipatory bail plea

A special court dismissed today the anticipatory bail plea of a private bank official, who was arrested by the Enforcement Directorate (ED) in connection with a fraud case post demonetisation, in a related cheating case.

Special Judge Poonam Chaudhry denied the relief to 32-year-old Vineet Gupta, a branch manager in Axis Bank’s Kashmere Gate branch who was suspended, in the case lodged against him by Delhi Police.

Gupta, who is in judicial custody in the case lodged by the ED, sought anticipatory bail saying he apprehends that police would arrest him if he gets bail in the ED’s case which is pending before another court.

He said his bail plea in the money laundering case is pending before another court.

The prosecutor, however, opposed his plea saying he cannot be given a blanket order granting protection from arrest.

Earlier, Gupta had approached the court seeking to surrender in the cheating case to which the police had said it would take his custody at an appropriate stage.

The ED had lodged a criminal complaint against two bankers and others based on a Delhi Police FIR after three persons were intercepted with Rs 3.7 crore cash in old currency notes in November last year in front of the bank’s Kashmere Gate branch.

Police booked Gupta for cheating and criminal conspiracy under the IPC and under the Prevention of Corruption Act.

Besides Gupta, 33-year-old Shobit Sinha, suspended manager (operations) in the bank, and Kushwaha, suspected to be the mastermind behind floating of shell companies, are lodged under judicial custody in the money laundering case for alleged irregularities related to conversion of old currency and supply of new notes.

Axis Bank had said in a statement, “The bank is committed to following the highest standards of corporate governance and has zero tolerance towards any deviation on the part of any of its employees from the set model code of conduct. In this particular case, the bank has suspended the erring employee and is cooperating with the investigating agencies.

( Source – PTI )

Demonetisation puts probe agencies in a fix

Demonetisation puts probe agencies in a fix
Demonetisation puts probe agencies in a fix

Probe agencies like CBI and NIA have found themselves in a piquant situation following demonetisation of old Rs 500 and Rs 1,000 notes, taking varying stands in different courts on whether to keep the seized crime money with them to safeguard evidence or deposit the currency to save them from becoming worthless.

The dilemma is simultaneously bothering the accused as well, as they have to accord consent in courts that the seized crime money may be deposited by probe agencies.

Such consent would bar them from raising defence at a later stage in trial with regard to the authenticity of the seizure or whether the same currency notes were seized during the alleged raids.

In one case, a special court allowed the CBI’s plea to deposit Rs three lakh as fixed deposit receipts after accused Ashutosh Kumar Singh, who was working as a Deputy General Manager of the Handicrafts and Handloom Export Corporation of India Ltd (Ministry of Textiles), consented that he was “not disputing the identity of the amount/money seized”.

CBI, in its plea in the graft case, said “due to demonetisation scheme of Government of India, now the seized currency (old currency) is needed to be deposited in the bank account maintained by the CBI. In order to save the seized currency from turning invalid, necessary orders are solicited from the court.”

However, in another graft case involving former Medical Council of India President Ketan Desai, the same agency opposed the plea of the accused that Rs two crore, which was allegedly seized in cash by CBI over six years ago, be deposited in a bank.

CBI claimed that the notes were bribe money which were important evidence. If deposited, it would damage the prosecution case as these were yet to be exhibited before the lower court, it said. The trial has been stayed by the apex court in the case.

In a terror case, National Investigating Agency (NIA) supported the plea of suspected ISIS operative, Syed Mujahid, that the seized crime money to the tune of Rs 2.83 lakh can be deposited in bank, after keeping on judicial record, the “photocopy/scanned copies of old currency notes”.

The money can be deposited in NIA’s treasury account, Mujahid told the court.

NIA also urged the court to direct the accused not to raise any objection regarding admissibility of the seizure memo which was prepared after recovery of the search operation at later stage during the trial.

District Judge Amar Nath allowed the plea after the accused gave his consent to it.

( Source – PTI )

Demonetisation, Tatas, drugs ban kept Delhi HC busy in 2016

Demonetisation, Tatas, drugs ban kept Delhi HC busy in 2016
Demonetisation, Tatas, drugs ban kept Delhi HC busy in 2016

A large number of PILs on issues relating to demonetisation and litigations involving Tatas over management and operation of its JV airline AirAsia India and the iconic Taj Mansingh hotel in the heart of capital were among major financial and corporate cases handled by the Delhi High Court in 2016.

The high court, which was flooded with PILs on issues arising out of demonetisation, also gave much-needed relief to the Narendra Modi government by refusing to go into the “correctness” of the November 8 notification scrapping Rs 1,000 and Rs 500 notes, saying courts should not venture into policy matters.

The order had come much before the Supreme Court, which had initially declined to stop the proceedings in various high courts, allowed the Centre’s plea to pass a direction that no court in the country other than itself will entertain matters relating to demonetisation.

Just when the Modi government was heaving a sigh of relief over demonetisation, it suffered a major setback as it failed to defend banning of 344 fixed dose combination drugs as multinational pharma and healthcare giants like Pfizer, Glenmark, Procter & Gamble and Cipla won the battle, with the judge saying the decision was taken in a “haphazard manner”.

So was the case relating to the auctioning of coal block when in a crucial judgement, the high court held that the government’s decision to club different specified end-uses together, barring power, for auctioning of coal blocks “ran counter” to the logic of classification itself.

Fortunately, the court dismissed the pleas of some private companies challenging this decision of the Coal Ministry observing that they had participated in the tendering process for coal auctioning which was known to them.

When the Tata-Mistry controversy hogged the limelight, the Tata group suffered a setback as the high court cleared the decks for auctioning of Taj Mansingh Hotel in Lutyen’s Delhi by giving a go-ahead to New Delhi Municipal Council, saying the group’s Indian Hotels Company Ltd, which runs the hotel, had “no right” of renewing the licence.

The Tatas also had a tough time when the high court asked AirAsia India, a joint venture between Tata Sons and AirAsia Berhad, to place before the DGCA its brand licensing agreement (BLA) with the Malaysian entity to determine who controls the Indian low-cost carrier.

( Source – PTI )

Delhi HC adjourns sine die pleas against demonetisation

Delhi HC adjourns sine die pleas against demonetisation
Delhi HC adjourns sine die pleas against demonetisation

Delhi High Court today adjourned indefinitely the hearing on pleas challenging the Narendra Modi government’s demonetisation move after it was informed that the Supreme Court has stayed all proceedings pending before different courts on related issues.

“The Supreme Court is seized of the issue and has also stayed the proceedings on pleas challenging the November 8 demonetisation notification pending before different high courts (in India) and has said only they would hear them,” a bench of Chief Justice G Rohini and Justice Sangita Dhingra Sehgal said.

The bench further said since the petitioners were not withdrawing their petitions as per Supreme Court directive, the “case is adjourned sine die”.

Sine die refers to business or proceedings that have been adjourned with no appointed date for resumption.

The apex court had on December 16, said no other courts in the country shall entertain any writ petitions relating to the demonetisation issues.

The direction came on the pleas challenging the November 8 decision to demonetise high-value currency notes of Rs 500 and Rs 1,000 and also the petition filed by Centre for transfer of matters pending before various high courts to either the apex court or one of the high courts.

“We make it clear that the petitioners in the high courts are free to intervene in the Supreme Court,” the apex court bench had said.

The high court was hearing two separate pleas, one of which has sought discontinuation of the new Rs 2,000 currency note while the other petition has sought a direction to the Centre to ensure that all the ATMs are dispensing cash and people do not suffer.

( Source – PTI )

Madras HC dismisses PIL against demonetisation

Madras HC dismisses PIL against demonetisation
Madras HC dismisses PIL against demonetisation

The Madras High Court today dismissed a PIL seeking a direction to the Union government to declare the notification on demonetisation as illegal and ultra vires to provisions of the Reserve Bank of India Act.

When the PIL filed by Suchitra Vijayan, barrister-at-law, came up earlier, the court said counsel for the Union government had pointed out that the challenge to the notification has already been rejected by a division bench of the high court’s Madurai bench.

The First Bench, comprising Chief Justice Sanjay Kishan Kaul and Justice M Sundar, today found fault with the petitioner for the language used by her while referring to the order passed by the Madurai bench.

In its order, the court said, “The language should have been eschewed.”

“The petitioner has also referred to the implementation of the demonetisation policy which is alleged to have caused loss of life and disruption of economic livelihood,” it said.

This would be matter of implementation rather than challenge to the policy and the Supreme Court is already seized of the issue, it said.

“We are, thus, not inclined to entertain this petition, a coordinate bench of this court having examined the whole issue in another writ petition before the Madurai bench decided on 10.11.2016. Writ petition stands dismissed,” the court said.

According to the PIL, the government has failed to assess the effects of demonetisation diligently and failed to prepare the country for one of the biggest policy implementations in its banking history.

The demonetisation of the entire denomination of Rs 500 and Rs 1,000 notes was outside the scope of section 26 of the RBI Act, it contended.

( Source – PTI )