New Delhi, February 7, 2017

The Lok Sabha today passed the Specified Bank Notes (Cessation of Liabilities) Bill, 2017 which provides for holding, transfer and receiving of old 500 and 1000 rupee notes a criminal offence which bill seeks to end the liability of RBI and the government on the currency notes demonetised in November last year.

The bill states that the government took the demonetisation decision on the recommendations of the RBI's central board to eliminate unaccounted money and fake currency notes from the financial system.

Once passed by Parliament, the bill will replace an ordinance promulgated on December 30 last year which provides for a fine of 10 thousand rupees or five times the cash held, whichever is higher, on holding of more than 10 banned notes.

Apart from aiming at ceasing the liability on old notes, the bill also provides that an Indian citizen, who was outside the country between November 9 and December 30, will be entitled to tender the demonetised notes within the specified period.

Replying to a debate on the bill, Finance Minister Arun Jaitley termed the government's move morally and ethically in right direction. He said, the decision will hit those who were evading tax and now they will come under tax net.

He rejected the opposition allegations saying that the agriculture sector and others have not been impacted post-demonetization.

The Minister said that sowing of Rabi crops registered a growth of 7 percent in November and December 2016 as compared to previous year. He said state VAT collections have also increased. He hit out at Congress alleging that it has not taken any steps to curb the black money.

The Union Minister clarified that the government was holding consultation with RBI over demonetization since February 2016 and every week there were meetings with RBI officials.

He said the entire country was patient over the decision except the opposition parties.

Earlier, initiating the discussion, RSP MP N K Premachandran termed the notification to declare high value currency notes as illegal. He said the government should have taken legislative route to take such decision.

Shashi Tharoor of Congress also criticized the move saying it was ill-prepared decision. TMC leader Sougata Roy said the demonetization has hit common man.

[The Business Standard]