Prime Minister Narendra Modi’s surprise announcement will not only disrupt the existing stockpile of black money stashed illegally and put an end to counterfeit money, but will also completely disrupt funding for terrorist activities and money trails to separatist movements across the country.
To sources here told DNA that the decision largely owed its origin to a report submitted by the Financial Intelligence Unit (FIU), concluding that 15% of black money or suspicious transactions were finding their way to financing terrorism or extremist movements. Quoting figures, they said that between 2011 and 2016 that circulation of Rs. 500 notes had grown to 76% and Rs. 1,000 notes to 109%. They also quoted from intelligence reports which stated that a movement of some Rs 100 crore had been recently detected in Jammu and Kashmir, coinciding with the current unrest — implying that someone was financing it.
After exhausting both diplomatic and military options, by isolating Pakistan globally, and launching surgical strikes across the LoC, the Indian strategic community believes the latest step will help to complete the dismantling of the terror support system within the country. This, they believe, can only be achieved by choking their funds.
While investigating the Mumbai terror attack of November 26, 2008, the Intelligence Bureau had reportedly concluded that approximately Rs1,17,37,820 were spent by the Pakistan state sponsored terror outfit Lashkar-e-Tayiba for the execution of these attacks.
It is estimated that nearly Rs5,000 crore of Fake Indian Currency Notes (FICN) have been pumped in India by Pakistan’s ISI to fund terror activities and destablise the Indian economy. According to a study by the Indian Statistical Institute, almost 250 currency notes out of 10 lakh are fake and minimum of Rs70 crore FICN enter the Indian market every year.
Colonel (retd.) Vivek Chadha, deputy director at the Institute of Defence Studies and Analysis (IDSA) says that a major part of funding for terrorism from external sources comes through counterfeit currency, drug trafficking, charities, non-governmental organisations (NGOs) and finally as a result of state sponsorship by Pakistan. He believes that terror activities require funding for a wide range of stores, training, logistics, explosives, arms and ammunitions, surveillance, communication gadgets, setting up training camps, acquisition of inflammatory jihadi materials, day to day and post death payments, travel etc.
But since the groups themselves require a considerable amount of money for their sustenance, Chadha believes that the current announcement will come a long way to ensure a peaceful India.
But there are others, who say, that terrorists don’t require a lot of money to conduct strikes. Figures quoted by intelligence agencies around the world at a global anti-terror conference stated that the 1993 World Trade Centre bombings needed just Rs9 lakhs (US$19000), Madrid bombing Rs8 lakhs (US$16000), and the Bali bombing just Rs. 7 lakhs fifty thousands (15,000 US dollars).
From India’s point of view intelligence agencies suspect that Pakistan’s ISI has been raking in an annual profit of around Rs 500 crore by circulating FICN in India. They say that the ISI is estimated to be making a profit of 30-40% on the face value of each FICN produced in Pakistan.
“There have been over one hundred seizures outside Indian since 2011. Interrogation details confirm Pakistan’s direct involvement as in 55-60% cases we could establish their involvement. But this also means that by conservative means a major portion of the rest of Rs. 3000 crore is in circulation and waiting to be used for terror activities,” said an intelligence official.
The total fake notes that came into India in 2010 alone from abroad was pegged at Rs 1,600 crore that puts the ISI’s total profit at Rs 500 crore.
Despite tough steps by the Reserve Bank of India, the government so far has not been able to weed out FICN as Pakistan has been printing good copies of original currency notes, which is discernible only to trained eyes.
As a result, the government, sources said, has made arrangements to make new currency notes of Rs. 500 and Rs. 2000 denominations. They will enter the market from November 10 and will be virtually impossible to copy. These notes will have highly advanced and sophisticated security features that cannot be reproduced easily by Pakistan.
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