Demonetization, while fighting corruption, may lead to temporary slowdown of economy: President Pranab Mukherjee

President Pranab Mukherjee said on Thursday that demonetization may lead to temporary slowdown of the economy.

Pic courtesy: @RashtrapatiBhvn (File Pic)

Delhi: President Pranab Mukherjee said on Thursday that demonetization, while immobilising black money and fighting corruption, may lead to temporary slowdown of the economy.

"We all will have to be extra careful to alleviate the suffering of the poor which might become unavoidable for the expected progress in the long term," he said, while delivering New Year Message to the Governors/Lt Governors through video conferencing from Rashtrapati Bhavan.

The President added that while he appreciated the thrust on transition from entitlement approach to an entrepreneurial one for poverty alleviation, he is not too sure that the poor can wait that long.

"They need to get succour here and now, so that they can also participate actively in the national march towards a future devoid of hunger, unemployment and exploitation."

He further said that the conduct of free and fair elections "has made our democracy one of the most vibrant in the world. Elections reflect the attitudes, values and beliefs of the people towards their political environment. They symbolise the sovereignty of the people and provide legitimacy to the authority of the government. They also serve the purpose of regulation of public policies and mobilization of public opinion."

President also said that goodwill must prevail between different communities.

"In a pluralistic democracy like ours, tolerance, respect for contrary views and patience are a must. These values have to be preserved. The multiplicity in culture, faith and language is what makes India special," he said.

Demonetization, while immobilizing black money and fighting corruption, may lead to temporary slowdown of the economy #PresidentMukherjee

— President of India (@RashtrapatiBhvn) January 5, 2017

The conduct of free and fair elections has made our democracy one of the most vibrant in the world #PresidentMukherjee

— President of India (@RashtrapatiBhvn) January 5, 2017

Governors through their interaction and wise counsel can play an important role in easing the tensions in the society #PresidentMukherjee

— President of India (@RashtrapatiBhvn) January 5, 2017

The Narendra Modi government on November 9 had demonetised old Rs 500 and Rs 1,000 notes worth Rs 15.44 lakh crore, 86 per cent of the total currency in circulation.

Meanwhile, in a bid to put to rest speculation on the quantum of scrapped notes deposited in banks and post offices, the RBI today said it is reconciling invalid currency with physical cash balance and will release the numbers at the earliest.

The Reserve Bank's clarification on the Specified Bank Notes (old Rs 500/1,000) comes in the backdrop of various reports estimating that over 95 per cent of the defunct notes have been returned till December 30.

Now that the demonetisation scheme has come to an end, the RBI said the figures would need to be reconciled with the physical cash balances to eliminate accounting errors/ possible double counts.

On the last day of demonetisation, the RBI had asked all banks including cooperatives to report details of deposits of old Rs 500/1,000 notes to it after the close of banking hours.

The Finance Ministry had said that there were lots of areas where double counting could have happened.

(Content courtesy - PIB India and PTI)