International Journal of Commerce and Management Research

Authors
Dr. K Prabhakar Rajkumar

Abstract
The demonetization move by the Government and its rationale and impact are being debated by all concerned, in homes and newsrooms. In the dark night of Tuesday, 8th November 2016, a bold initiative taken by the Government to ban Rs. 500 and Rs.1, 000 currency notes from circulation from the midnight of that day was announced by the Prime Minister. The ultimate aim of this scheme was said to be eradication of the deep roots of shadow economy from India and to make the nation free from the clutches of huge forces holding unaccounted money. The scheme has evinced a mixed reaction from Indian subjects all over the country. The main aim behind the demonetization of high value notes was the eradication of black money. In a surprise announcement on November 8, the Government withdrew notes of denominations of Rs.500 and Rs.1, 000 as legal tender, rendering 86 percent of the currency circulating in the country worthless. In taking such an important economic decision affecting almost all people in the country, “the Government did not find it necessary to promulgate an ordinance, which is the tried, tested and constitutionally valid way to bypass the legislature. The Government used “a gazette notification to bypass the legislature and implement a decision that affected the entire population and caused significant collateral casualties”. So, the decision of the Government to demonetize the high value currency notes simply by using a gazette notification to bypass the legislature (parliament) has made all of us to ask a question: is there a democratic deficit in India?