The High Denomination Bank Notes (Demonetisation) Act, 1978
The High Denomination Bank Notes (Demonetisation) Act, 1978 | ||
---|---|---|
Parliament of India | ||
Long title
| ||
Citation | Act XI of 1978 Bill titleNumber 20 of 1978 | |
Amended by | ||
High Denomination Bank Notes (Demonetisation) Amendment Act, 1998 | ||
Related legislation | ||
| ||
Status: Repealed |
The High Denomination Bank Notes (Demonetisation) Act, 1978 was an act of the Indian Parliament that demonetized the high-denomination bank notes of ₹1000, ₹5000, and ₹10000. It was first introduced as the High Denomination Bank Notes (Demonetisation) Ordinance, 1978, by the then President of India Neelam Sanjiva Reddy.[3] The then Prime Minister of India, Morarji Desai of Janata Party, and Finance Minister Hirubhai M. Patel were considered key architects in the development and execution of the policy,[4] while RBI Governor Shri I. G. Patel was opposed to it.[5]: 128
As a result of this legislation, 93% of the total currency notes in circulation were exchanged, while the remaining went out of circulation or were not exchanged.[6]: 34 It was repealed by the Jan Vishwas (Amendment of Provisions) Act, 2023.[7]
History
Demonetisation Ordinance, 1946
The first demonetisation of India was carried out in the year 1946 when, under the then
Passage in the Parliament
The Act was passed by consideration in both Houses of Parliament and supreme court, and was implemented by an issue of an
The Act
Preamble
The Preamble to the Demonetisation Act, 1978 highlighted the need for demonetisation of certain high denominations bank notes in the public interest. The reason this was considered necessary was because high-denomination bank notes were considered detrimental to the Indian economy due to their use for illegal purposes.[1]
Details
The Demonetisation Act of 1978 has fifteen sections.[1]
Section 2 details the usage of bank notes in Act.[9]
Amendment of 1998
Section 2 of the Act was amended in the winter session of
Opposition
The constitutional validity of 1978 Act of Demonetisation was challenged in the
Aftermath
The chief economic advisor of the State Bank of India affirmed that 25% of the proscribed currency notes did not return to the banking system during the 1978 demonetisation episode.[14]
See also
References
- ^ a b c d "The High Denomination Bank Notes (Demonetisation) Act, 1978" (PDF). indiacode.nic.in. Department of Legislative Affairs, Ministry of Law and Justice, Government of India. Retrieved 3 November 2022.
- ^ a b "Report of the Central Board of Directors for the Year Ended 30th June 1946" (PDF). rbidocs.rbi.org.in. RBI. 5 August 1946. Retrieved 14 December 2023.
- ^ "Neelam Sanjiva Reddy, issued an Ordinance to demonetisation, in 1978". Indian Express. 15 November 2016.
- ^ "Key people in 1978 demonetisation". India Today. 23 November 2016.
- ^ a b Gavai, BR (2 January 2023). "Vivek Narayan Sharma v. Union of India (Majority Judgement)" (PDF). main.sci.gov.in. Supreme Court of India. Retrieved 25 December 2023.
- ^ a b Nagarathna, BV (2 January 2023). "Vivek Narayan Sharma v. Union of India (Dissenting Judgement)" (PDF). scobserver.in. Supreme Court of India. Retrieved 25 December 2023.
- ^ "Jan Vishwas (Amendment of Provisions) Act, 2023" (PDF). egazette.gov.in. Ministry of Law and Justice, Government of India. 11 August 2023. p. 29. Retrieved 25 December 2023.
- ^ "Supreme Court verdict on 1978 demonetisation". The Times of India. 12 November 2016.
- ^ "Definition of Bank notes in Act". The Hindu. 14 November 2016.
- ^ "Reintroduction of 1000 rupees in 1998". DNA India. 18 November 2016.
- ^ "1978 Demonetisation in India". Deccan Herald. 9 November 2016.
- ^ "Yaswant Sinha, reintroduced 1000 rupee notes, in 1998". Indian Express. 16 November 2016.
- ^ "Supreme Court Upheld Constitutional validity, of 1978 Act". First Post. 25 November 2016.
- ^ Only 75% of demonetised currency returned to the central bank in 1978