Citing India as example, Pakistan senator suggests demonetisation

Taking a cue from demonetisation of higher currency notes in India, a Pakistani opposition party lawmaker has submitted a resolution in the Senate to withdraw 1,000 and 5,000 rupee notes from circulation in the country to tackle corruption.

The resolution submitted by Pakistan Peoples Party (PPP) Senator Osman Saifullah Khan comes at a time when Pakistan's population is gradually shifting to cash economy due to the government's ill-conceived taxation policies, said Express News.

"The house urges the government to take steps to withdraw from circulation as legal tender the high denomination Rs 5,000 and Rs 1,000 notes so as to reduce illicit money flows, encourage the use of bank accounts and reduce the size of undocumented economy," reads the resolution.

This is the only way that will compel people to use banking channels and launch a crackdown on black money circulating in the economy, said Khan, speaking at a meeting of the Senate Standing Committee on Finance on Thursday.

However, Committee Chairman Senator Saleem Mandviwalla underlined the need for taking the views of all stakeholders.

The resolution was moved in the Senate a couple of days after Indian Prime Minister Modi announced the demonetisation of Rs 1,000 and Rs 500 bank notes, making them invalid in a major assault on black money, fake currency and corruption.

"At this point, we do not see a reason to withdraw the Rs 5,000 currency note," Abid Qamar, spokesman for the State Bank of Pakistan, told Express News.

Pakistan's economy has already started making a gradual shift to cash as protection against the government's taxation policies, official statistics reveal.

In fiscal year 2015-16, the growth in banking sector deposits was far lower than the previous year while the currency in circulation increased at a much rapid pace, revealed minutes of the last Monetary Policy Committee (MPC) meeting.

The General Pervez Musharraf-led government had introduced the Rs 5,000 denomination notes despite resistance from the State Bank of Pakistan. The notes made it easy for the people to keep cash instead of depositing money in banks.

--IANS

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