NEW DELHI: Even as banks opened around the country with reports of long lines and frayed tempers, Finance minister Arun Jaitley today assured people that demonetising high-denomination currency is beneficial to all in the long run, despite short-term problems. And there will be more currency notes - not just Rs 500 - that will be reintroduced with a new design and features, added economic affairs secretary Shaktikanta Das.
The economic affairs secretary didn't give a time-frame or details of which other notes will be redesigned, but he did say that in the coming months, the Rs 1,000 notes will also be brought in with a new design.
Minister Jaitley, Das and chief economic adviser Arvind Subramanian were all addressing an Economic Editors' conference in New Delhi today, where most, if not all, questions were about the scrapping of Rs 500 and Rs 1,000 notes.
About the sudden nature of the announcement to scrap these notes - a decision made to halt terror being funded by Pakistan, and to stem the rising tide of black money - Das said that the process had been under way for the last few months.
"Only 2-3 people in the RBI were involved in the designing of notes," said Das.
The demonetisation plan, the best kept secret in the power corridors of the national capital, was a tightly policed affair with only a handful of top officials privy to the move. Apart from ministers at the Cabinet meeting who had to remain in quarantine for a while, members of the Reserve Bank of India (RBI) board too left only after PM Narendra Modi's speech two days ago when he announced the ban.
Finance minister Jaitley also reiterated what Prime Minister Modi said two days ago about conspicuous consumption and how it relates to the scrapping of the 500 and 1,000 rupee notes.
"This decision will impact the spending habits of people," Jaitley said, likely referring to conspicuous consumption, as also to illegal, mostly-cash real estate deals.
Jaitley again assured the people that the RBI has taken all necessary steps to keep banks open to the extent necessary. It has already been decided to keep banks open on the weekend, he added.
""There will be an impact on small purchases for a few days, till there is adequacy of currency, but it is beneficial in long run," Jaitley said adding, "It is only those with large amounts of undisclosed money who will have to face the consequences under existing laws," Jaitley said
In fact, chief economic adviser Arvind Subramanian succinctly described the demonetization.
"Instead of seeing it as a reduction of wealth, it must be seen as transfer of unaccounted wealth...a transfer of this unaccounted wealth from the private sector to the government and public sectors, which will (then) boost the economy," Subramanian said.
