Tuesday, January 6, 2015

Real estate industry associations urge PM to introduce currency notes of Rs 1, 5 and 10-lakh denominations

Encouraged by the news report, in a section of the print media, that Prime Minister Narendra Modi has liked and approved the idea of introducing a Rs 25 currency note in order to ease the 'Ramayan' of the acute shortage of Rs. 5 coins that leads to everyday difficulties for small businesses throughout the country, real estate related all India business associations have come out with their idea to solve their own problems. 

The Rs 25 note idea, according to a leading Gujarati newspaper, was given by one businessman from Chandigarh who got impressed by PM's "Mann Ki Baat" radio program and decided to send his suggestion to him directly. PMO has been reported to have initiated action to implement his idea.

Impressed by PM's quick action in solving difficulties of small traders, the leading All India Builders Associations have come together and submitted a memorandum to the Prime Minister urging for the urgent need to address their similar day-to-day problem involving handling of huge amounts of cash. If F4Fnews sources around the PMO are to be believed, the finance minister is understood to have got green signal from the PM but may face some resistance from Dr. Raghuram Rajan, the RBI Governor, who has been successful in establishing his own image in the political as well as bureaucratic and business circles, although not yet among the general public.

A leading builder of Mumbai, whom F4Fnews couldn't contact, said "As the prices of real estate have sky rocketed, the quantum of cash involved in our business has multiplied more than 10 fold. Every day, we have to handle crores of rupees and transporting this huge amount of cash presents its own threats (for us) and opportunities (for desi couriers called 'angadias' and fake note printers). If the government introduces Rs. 1, 5 and 10 Lakh notes then it will be of tremendous help to us. This will solve the sensitive logistics issues facing all users of huge cash and greatly reduce not only our burden of handling it but all the big operators involved with other cash-intensive activities like bullion, film, match-fixing (betting), grey market, political etc. will also be greatly benefited."

When we asked about RBI Governor's possible resistance, a prominent economist, who has more than two decades of work experience with the now dismantled Planning Commission, said "I also feel like all others that Mr. Rajan may resist this move at a time when the whole country is waiting for the black money to be brought back from wherever it is. But everyone knows ultimately who the real boss in our country is. Therefore, nobody can have any doubt that these high denomination notes will be issued once the PMO has accepted the suggestion.” “Also, knowing the style of PM Modi’s working, I am sure he must have instructed the FM to see that counterfeiting of such high valued notes was impossible even if that means outsourcing the notes from US or Japan. I also expect the notes to come with a unique Teflon coating to make them durable, as well,” he added.
Dr. Raghuram Rajan (Left) and Dr. Subramanian Swamy (Right)
Another F4Fnews source, who claims to be quite near, but not dear, to the renowned economist-cum-politician, Dr. Subramanian Swamy, said on condition of anonymity that “Dr. Swamy liked the idea so much that he has gone to the extent of advising the PMO to issue these high denomination new notes under the authority of a new banking organization “Reverse Bank of India”, if Dr. Rajan remains adamant on not agreeing to this brilliant idea and refuses to lend RBI’s name on these notes. 

If everything goes well, we can expect these ultra-modern new notes from the FY 2015-16.

Our efforts to contact various stake holders in order to verify and substantiate the above mentioned sources, as usual, have failed so far.

GD Jasuja : Founder, Faking4Fun 
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