Demonetisation: Former RBI governor Bimal Jalan questions timing, secrecy

Former RBI governor Bimal Jalan has questioned the timing and secrecy of the government’s decision to demonetise Rs 1000 and 500 notes.

Jalan was RBI governor from 1997 to 2003, coinciding with the first NDA government of Atal Bihari Vajpayee.

"When you demonetise a legal tender, there must be a very good reason to do it. War, security threat. What demonetisation does is to give, as it were, a message to people that this government will not tolerate black money. The second part, which is equally relevant is, why now," Jalan said.

Rubbishing the government’s argument that secrecy was essential for the success of the move, Jalan said telling people the government was concerned about black money was also about giving them a notice.

"It could be done in a way where people are prepared. Telling people that we are concerned about black money is also about giving them a notice. Supposing, instead of being a secret decision, if it was announced in public. What would have happened?" he said.

"There is no reason to my mind to be secretive, unless there is an emergency. I want to do it in three weeks, or two weeks or one week. As in a surgical strike. But this is not the same thing. On that, there can’t be two views. I am talking as a citizen here," he added.