India’s demonetisation

14 Nov 2016

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IN India it seems Prime Minister Modi’s government is seriously working to end black money and weed out corruption. The 500- and 1000-rupee are no longer legal tender and their circulation has been banned. This demonetisation exercise is intended to choke black money, ensure transparency in financial dealings and discourage evasion of taxes and money laundering.

When there is a lot of hue and cry over offshore companies, mega corruption and money laundering, why is a similar step not considered here? The government should demonstrate its intent and at least withdraw the 5000-rupee note as it facilitates the hoarding of black money and illegal transfer of wealth.

Also, there is an urgent need to annul the infamous ‘Economic Order Reform Act’ of the 1990s which literally allows a legalised mode of money laundering. At the same time, opening foreign currency accounts with commercial banks by Pakistani individuals should be abolished to restrict transfer of wealth abroad. Further, there is no need to permit exchange firms to operate, as they provide an important conduit for illegal money transfer. Genuine foreign exchange requirement by Pakistani citizens for travel, medical, children education, etc. can be managed by commercial banks.

Kulsoom
Karachi

Published in Dawn, November 14th, 2016