Reintroduction of Rs 1,000 note not necessary: Prof Dholakia -Governance Now

Reintroduction of Rs 1,000 note not necessary: Prof Dholakia

The jury is out on whether introducing new currency notes is logical

Praggya Guptaa | November 22, 2016 | New Delhi

#IIM Amhedabad #scrapped currency #Demonetisation

“It is not necessary to have re-introduction of Rs 1,000 when there is already a Rs 2,000 rupee and Rs 500 rupee new note. There is no as such compelling reason but as far as it is logical or not, it is difficult to say right here,” said Ravindra H Dholakia, professor, IIM Ahmedabad and member, Monetary Policy Committee.

Talking to Governance Now at 44th annual convention of Institute of Company Secretaries in Ahmedabad, Dholakia said that introducing new currency notes is legal but whether it is logical or not is a matter of opinion.

Saurabh Soparkar, senior advocate, Gujarat high court said that in any case it is a very complex issue and added that normally the theory is bad money will drive out and good money is going to be here. Unless there are attempts to bring in bad money again, the significant part of the good money will prevail in economy.

Soparkar expects that following demonetization, there is bound to be better growth rate. The tax base will increase.

Gaur Gopal Das from ISKCON Mumbai said that for sustainability, there is a need for external and internal change. The government has applied external force, but to stop further accumulation of black money, it should come from within, otherwise people will look for other channels to accrue black money.

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