Thiruvananthapuram: The CPI(M)-led LDF government in Kerala Tuesday criticised the demonetisation of Rs 1,000 and Rs 500 currency notes by the Centre with effect from midnight, saying the move would not wipe out black money from the country.
Reacting to the decision, state Finance Minister TM Thomas Issac said demonetisation of Rs 1,000 and Rs 500 currency notes was not a solution to the black money issue.
"It is an absurdity to think that unaccounted money in the country is only kept in Rs 1,000 and Rs 500 denominations. The majority of the black money is stored in foreign countries and it is routed to the Indian banking system through hawala.
"Besides, black money is also kept in the form of valuable objects like gold and also in 'benami' land transactions," he said.
Issac alleged that it was the BJP government's economic policy which encouraged this kind of "financial irregularities and capitalism".