Finally, there was someone to voice out people’s words to the members of the government. From the time the Indian government put an end to high value notes of currency and changed them with new ones, it became quite evident that taking such steps could result in showcasing concealed assets and deter tax evasion.
This came about as the Senate passed a resolution three days back – Monday asking the direction to pull out the high denomination Rs. 5000 notes from circulation.
The opposition party’s senator, Osman Saifullah Khan of the Pakistan People Party voiced the resolution. But PMLN government strongly conflicted it. Nevertheless, because PPP has a mainstream in the Senate, the resolution was passed.
The resolution stated that the government should demonetize the highest denomination note of currency “in order to reduce illicit money flow, encourage the use of bank accounts and reduce the size of undocumented economy”.
Mr Saifullah highlighted that nearly all illegal activities are done using the Rs. 5000 note. Yet, the Senator stated that the government should opt the same way as adopted by the Indian government. The method did cause issues and anguish to the general public.
He also suggested that the circulation of the note should be stopped and eventually remove the currency from the economy in 3 – 5 years.
Those at the opposition of the resolution was Federal Minister for Law and Justice Senator Zahid Hamid. He gave stats of the high denomination notes that currently around 3.43 trillion Rs. 5,000 bank notes are in circulation in the country, which is approximately 30% of the total currency’s circulation.
He put the issue that it’s not possible to pull out such a huge number of currency notes from the circulation without disrupting economy monetarily. He further said that if such move is taken then people will not prefer local currency and instead rely on foreign notes to cater the drop in local notes.
Let’s see how the government is able to look after the passed resolution and see if it brings any benefits considering the prolong demonetization period.