January 4, 2023
Good morning. In today’s either/view, we discuss whether the Supreme Court got the verdict on demonetisation right. We also look at the decrease in Rhino poaching cases in Assam, among other news.
📰 FEATURE STORY
Supreme Court verdict on demonetisation – Did they get it right?
One of the more controversial decisions by the current government came in 2016 with the demonetisation of high-value currency notes. What followed was confusion, worry, and chaos. People waited in long queues outside banks and ATMs. The RBI issued guidelines on deposits, withdrawals, and exchange of cash post-demonetisation.
While the government and its supporters stood by the decision and continue to this day, its detractors, including opposition parties, said the move has been detrimental to the Indian economy. Almost immediately, there were legal challenges to demonetisation. Now the Supreme Court has had its say stating the decision was legal. Was the verdict correct?
On November 8, 2016, Prime Minister made a speech to the country that would become consequential. “From midnight, ₹500 and ₹1,000 notes are no longer legal tender.” In his 40-minute speech, he argued that the move was to curb black money, financing of terrorism, and corruption. Banks and ATMs were closed for a couple of days in anticipation and preparation for collecting the now-defunct bank notes.
On November 9, a plea was filed in the Supreme Court. The opposition wasted no time in criticising the move. Former Prime Minister Manmohan Singh called the decision a monumental mismanagement and legalised plunder. As the banks continued to handle things the best they could, new currency notes were released for immediate use. The old ones were given an extended lifeline to be used at government hospitals, pharmacies, and petrol pumps.
Due to the cash crunch, there were reports of starvation and deaths. In December, a bench referred the question of demonetisation’s validity to a larger bench of five judges. The Supreme Court wasn’t pleased with the pace of remonetisation. Chief Justice TS Thakur questioned why people weren’t getting the rationed amount each week while some were receiving lakhs in the new currency. The court also brought up the issue of demonetisation’s constitutionality.
In the weeks and months that followed, there were strikes across the country as bank employees wanted an immediate injection of cash. They couldn’t handle the workload. When the economy took a hit with a drop in GDP growth rate for the fourth quarter of 2016-17 fiscal, finance minister Arun Jaitley said it was wrong to blame demonetisation. In July 2017, the government told the SC it had unearthed more than ₹71,000 crores of undisclosed income.
Cut to 2023, and the SC finally gave its verdict. In a majority 4-1 decision, it upheld demonetisation. The court agreed with the government’s overall objectives and intentions. The one dissenting opinion represents others who have long argued that the move was unconstitutional.
VIEW: The court got it wrong
The first thing to keep in mind is that the court didn’t render a verdict on the economic merits of demonetisation. It didn’t say whether the policy was good or bad for the economy. Any takeaway from the verdict as a vindication of the government’s move is wrong. The court hasn’t approved demonetisation. That wasn’t the question being asked. It was about the sanctity of the law-making process of demonetisation. Here, the verdict is wrong.
The verdict means the Modi government can, without tabling a bill, unilaterally enact a broad-based and consequential financial and economic policy without much or any public consultation. It doesn’t need to consult the RBI or have a debate in Parliament. As the verdict was announced, reports from RBI sources suggested they weren’t in the loop on the withdrawal of the notes.
The lone dissenting judge was Justice BV Nagarathna. She stated the decision to scrap the notes should’ve been through legislation. She called the decision unlawful and said there was no independent application of mind by the RBI. Broadly speaking, the move caused unnecessary hardships and didn’t do much to curb black money or corruption.
COUNTERVIEW: Vindication for the government
The court’s words are always open to interpretation, and opposition parties have taken note. It’s correct to state the court didn’t make an assessment of the policy. The question asked was whether it was legal and constitutional. The answer was in the affirmative. For the BJP and its supporters, the SC’s verdict is a vindication of Modi’s masterstroke.
The goal was to root out corruption and black money. Framing it that way meant the government’s intention was never malicious. The court said as much. Even the lone dissenting justice agreed. Justice B R Gavai read the majority opinion that partly said the government and the RBI were in consultation for six months.
The political slugfest that has followed seems to have conflated the verdict as a stamp of approval or disapproval. That wasn’t for the court to decide. They pointed out the government didn’t break any laws in enacting this policy. The impact of demonetisation has been controversial but positive in the long run. Combined with the growth of the digital economy, demonetisation has proven to be not only successful but constitutional as well.
- Demonetisation anniversary: A timeline of how note ban unfolded in the country – Indian Express
- Demonetisation in India: Timeline – Zee Business
- Notes Ban Upheld: 5 Big Quotes From Supreme Court Verdict – NDTV
- Valid points: Editorial on SC verdict on demonetisation – The Telegraph
- Supreme Court decision to uphold demonetisation on technical grounds will haunt the nation – Indian Express
- To say demonetisation was upheld is misleading, wrong: Congress on SC verdict – Sisat Daily
- Demonetisation move ‘unlawful’: What Justice B V Nagarathna said while dissenting with SC’s majority ruling – Indian Express
- Demonetisation Verdict: Breakdown of the majority and minority opinions – SCC Blog
- Demonetisation verdict: PM Modi’s visionary move has been vindicated by Supreme Court – Indian Express
What is your opinion on this?
(Only subscribers can participate in polls)
a) The Supreme Court’s verdict on demonetisation was right.
b) The Supreme Court’s verdict on demonetisation was wrong.
🕵️ BEYOND ECHO CHAMBERS
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For the Left:
The politics of Gandhi versus Savarkar
🇮🇳 STATE OF THE STATES
Mathura mosque panel files plea against survey order (Lucknow) – The management committee of the Shahi Eidgah mosque has filed an objection application in the local district court of Mathura on Monday. On December 8, after hearing the Hindu Sena’s plea challenging the ownership of the mosque, Senior Civil Judge Sonika Verma ordered an official inspection of the 13.37 acres of land by an ameen or official of the court. Earlier, the Hindu Sena’s appeal was dismissed by a lower court, following which they filed a revision petition in the local district court.
Why it matters: The Shahi Eidgahi Mosque, managed by the Intezamia Committee, shares its complex with the Shri Krishna Janmabhoomi Trust-owned Katra Keshav Dev Temple. The Hindu Sena argues that the land belongs to the deity lord Krishna, as it is his birthplace. They seek to shift the mosque due to its alleged construction atop the remains of a Hindu temple. More than a dozen such pleas have reached Mathura courts, and the recent order mirrors the Gyanvapi mosque court developments in Varanasi.
Another Russian found dead (Odisha) – Sergey Milyakov, the chief engineer of a ship moored to Paradip Port, was found dead on Tuesday. With the 50-year-old deceased’s body being sent for a post-mortem, Paradip Port Trust chairman PL Haranadh informed the Criminal Investigation Department (CID) of the Odisha Police that the cause of death was a heart attack. The CID has been investigating the deaths of two other Russians whose deaths occurred just ten days before Milyakov’s, in Odisha’s Rayagad district. Milyakov’s passing marks the death of three Russian nationals in less than two weeks.
Why it matters: On December 21, a four-member group of Russian men and their Indian guide Jitendra Singh checked into a hotel in Rayagad. A local administrative officer claimed that the men were tourists who wanted to witness the tribal culture in Odisha. When two of the Russians died one after the other, DGP Sunil Bansal ordered the CID to probe into the allegedly mysterious circumstances of their death. Accordingly, the case has gained the interest of law officers and the National Human Rights Commission. Like Miyakov, one of the Russians had passed away due to a heart attack, while the other suffered internal injuries after a fall from the third floor.
No Rhinos poached in 2022 (Assam) – On January 1, Chief Minister Himanta Biswa Sarma announced that no Rhinocerauses were poached in Assam in 2022. State government data shows that this is the first instance of no-poaching since 2001. According to the data, poaching cases dropped significantly after 2018. In 2019, a Special Rhino Protection Force was constituted by the Sarbananda Sonowal-led state government to track and stop rhino poaching and related activities at the Kaziranga National Park (KNP).
Why it matters: The Indian Rhino is a vulnerable species mentioned in the International Union of Conservation of Nature (IUCN) Red list. The species’ presence is limited to the Brahmaputra valley, North Bengal, and southern Nepal. The one-horned animals are poached for their horns, believed to have medicinal qualities and serve as status symbols. Poaching has caused the animals to fall into the endangered category. However, they have been gradually regaining their numbers and have been upgraded to a slightly better status of ‘vulnerable species’. According to The Asian Rhino Specialist Group (AsRSG), the one-horned Indian Rhinos have increased in number to 4,014 individuals, of which 2,613 can be found in the KNP, Assam.
Mahim Nature Park not part of Dharavi redevelopment (Maharashtra) – On January 2, the Dharavi redevelopment authority informed the Bombay High court that the Mahim Nature Park (MNP) would be excluded from the slum redevelopment project due to the area being reserved in the Development Plan. NGO Vanashakti and activist Zoru Bhathena had filed a Public Interest Litigation (PIL) into MNP, fearing that the area would be unlawfully used for redevelopment by the Slum Rehabilitation Authority. The court has thus discarded the plea.
Why it matters: MNP is locally referred to as the Green Lungs of Mumbai, which is host to numerous species of trees, birds, and butterflies. The poor air quality witnessed by the City in the month of December proves the importance of such sites of respite. The forest adjoins the world’s largest slum settlement Dharavi. When the Maharashtra government announced its fourth attempt at redeveloping the area, conservation activists worried about the status of MNP, which is protected under the Indian Forest Act, 1927. The latest clarification comes as a relief to concerned residents of Mumbai.
Karnataka sails ahead with Kalasa-Banduri project (Karnataka): On January 2, Water Resources Minister Govind Kajrol announced that the Karnataka government would move forward with the Kalasa-Banduri Project on River Mahadayi. Earlier, an all-party delegation of Goa’s government had appealed to Prime Minister Narendra Modi and other union ministers against the approval granted to the drinking water project, stating that the project would affect the water needs in North Goa.
Why it matters: The Kalsa-Banduri Project, initiated by the Karnataka government, envisages a dam diverting water from the Mhadei basin to the deficit basin of the Mala-Prabha. The sharing of River Mahadayi has been the cause of an inter-state dispute between Goa and Karnataka since 2022. In 2018, the Mahadayi Water Tribunal verdict allowed Karnataka to use 5.4 tmcft of the river, while in 2020, the union government issued a gazette notification to allow it to utilize more than the amount. The latest green light to the project is expected to aid BJP’s prospects in Kittur Karnataka, while it precludes the Congress party’s planned rally in January to demand the implementation of Kalasa-Banduri.
🔢 KEY NUMBER
8 km – The distance trekked by students of Bargur Hills, Tamil Nadu, every day due to lack of state transport.