Mere withdrawal of big currency denominations from circulation will not be sufficient to check black money, the Central government needs to keep a close watch on the movement of participatory notes and investments made by foreign institutional investors (FIIs), said agrarian economist and former Rajya Sabha member Yalamanchilli Sivaji.
Dr. Sivaji said the government should also make efforts to recover NPAs from various institutions.
Of the Rs. 14.95 lakh crore that was in circulation as Rs. 500 and Rs. 1,000 notes, at least Rs. 3,000 lakh crore to Rs. 4,000 lakh crore would be legitimised and the government would get a lot of it as taxes, he said.
He said demonetisation would affect politicians, corrupt officials, professionals like film actors and doctors and private trusts and predicted that the gold market would crash.
“The route of corruption will change. Since cash is no more acceptable, people will go for kind. With regard to detectable currency, people are already searching for ways to make them non-detectable. The real estate market will also collapse but no tears need to be shed,” Dr. Sivaji said.
