Black Money Won't Just White For The Govt

Black Money Won't Just White For The Govt


LEGAL MATTER While opinion is divided on whether the extinguished notes can improve govt's finances, experts say it would remain a liability with RBI until a law is passed to nullify in Away from the winding queues and social media chatter, there is a debate brewing among policy makers, RBI eggheads and economists on whether the government stands to gain monetarily from currency notes which do not flow back into the white economy.

There are those who believe that de-legalised notes which are neither exchanged nor deposited with banks can be used to improve government's finances as extinguished' currency bills lower the liability in RBI's books. But the monetary policy and legal departments of RBI think that the central bank's books cannot be used like a corporate balance-sheet where a reduced liability translates into gains, said an RBI official. "Notes are not exactly liability in the usual sense," said another.