The clever always find ways around it: Raghuram Rajan on Demonetisation

Mumbai, Nov 16: Even as the government defends the demonetisation exercise amid growing opposition, it has emerged that former RBI governor Raghuram Rajan didn’t think much of it.’He said there are other ways of tackling black money.

In August, at the annual Lalit Doshi memorial lecture, Rajan said, “I am not quite sure if what you meant is demonetise the old notes and introduce new notes instead. In the past, demonetisation has been thought of as a way of getting black money out of circulation. Because people then have to come and say “how do I have this 10 crores in cash sitting in my safe and they have to explain where they got the money from. It is often cited as a solution. Unfortunately, my sense is, the clever find ways around it.”

On November 8, in a sudden announcement that took everyone by surprise, the government demonetised high denomination bank notes — 500 and 1,000 currency notes .