Absurd to penalise holding old notes
The government has come out with an ordinance to extinguish the old Rs 500 and Rs 1,000 notes and to penalise possession of more than a handful of these notes after the deadline of March 31 for their surrender at RBI branches. Extinguishing demonetised notes is perfectly understandable. That is the only way to legally remove the RBI’s liability to honour the notes in question. And that is the way to reduce liability on the RBI’s books of the notes that fail to come back to the banking system and possibly liquidate an equivalent amount of assets and transfer them to the profit and loss account, from where the government can be paid extra dividends. But why penalise possession of old notes? And why has the bar been kept at 10 notes? It suggests ignorance of numismatic practices. Collectors of currency notes have at least two notes of each kind, one to display the obverse and the other to display the reverse. Notes differ not just by denomination. A note of the self-same denomination can have multiple variants, differing in size, colour, design (that includes the number of languages listed on the note), signature of the RBI governor of the time, inset alphabet, curious numbers and errors. A casual collector might have say, 20 notes each of Rs 500 and Rs 1,000 notes. Now, the government wants to punish them for their collector’s passion. This is patently absurd and calls for at least one more of the U-turns at which the government and the RBI have become adept.
Once demonetised, these notes no longer store value, nor can they be used for transactions. But they can serve as units of account in say, a game of Monopoly. Why not let something that has been rendered a plaything serve as a plaything? If the aim were to penalise someone for having hidden income from the government in the past, the law already provides for it but the penalty has to be linked to the extent of concealment, not to some notes held in possession. Penalising possession of old notes is like penalising possession of floppy discs, old wine bottles or milk teeth. Surely, the government has better things to do than to harry collectors of quaint things.
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