"Counterfeit Currency & Black Money – A Practical Response"
Quotations for consideration:
- "Men make counterfeit money; in many more cases, money makes counterfeit men” - Sydney J. Harris
- Counterfeit Currency debases the value of the lawful currency, increases inflation and acts against economic progress.
- Counterfeiting Currency and circulating it is a crime and, if done in a Country by another Country, is an act of War.
- More than a quarter of the currency in the hands of the public in India currently may be counterfeit. According to an estimate made by the Intelligence Bureau (IB).
- Fake currency dealers in Nepal had earlier projected that by 2010 nearly $ 2.2 billion worth of fake currency will be in circulation in India. It would be even more today. The Global Financial Integrity in its report said that the heavy flow of counterfeit notes has led to speculation that elements in Pakistan are trying to create confusion and destabilise India. The fake currency money is routed to the country through Bangladesh, Thailand, Dubai and Nepal.
- The ‘Black’ or unaccounted economic transactions are nearly 50 % of the economy of the Country. Such Black Money also encourages money being taken out of the Country (See ‘Indian Money in Foreign Banks’)
War is defined as essentially a Political or Economic Act by a Nation against another Nation to secure its Aim, and a Military Act only to the extent that Military forces may be required, as a last option, to be used to achieve that Aim.
It is thus evident that the making and introducing of Counterfeit Currency by one Nation into another is an act of War and calls for a strong and immediate response. However it is a surreptitious way of warfare and hence difficult to prove and retaliate against. In such a case, the best ‘defence’ is not ‘offense’ but only a good ‘defence’.
The best defence would be to negate the entire effort of the suspected enemy in producing and distributing the counterfeit notes. The solution proposed hereunder was not feasible for the USA when its Currency was similarly targeted in the past, allegedly by Iran. It would not have been feasible for us even a decade ago. But today when:
- The Aadhaar System identifies everyone and encourages everyone to have a Bank account to avail direct subsidy as applicable,
- The availability of Debit / Credit Cards is extensive,
- The spread of Banks across the Country with the ability to rapidly encash / credit Cheques is also extensive,
- The Negotiable Instruments Act makes the use of Cheques more acceptable and effective and can be made even more effective for even greater acceptability by declaring that issuing a cheque is as good as paying cash and, except in cases of extortion which need an FIR, no other excuses will be acceptable for not honouring the cheque.
- The lack of Capital account convertibility restricts the availability of Currency notes outside the Country,