The ordinance is important because it is necessary to put an end date on the legal charter of old notes, failing which it would continue to remain legal charter infinitely.
The three-month window between January 1 to March 30, 2017, for the deposit of old currency notes in specified offices of the Reserve Bank of India will remain open after submitting a declaration form.
The ordinance which would be passed on Wednesday is similar to the one in 1978. In 1978, the then Morarji Desai government had demonetised the Rs 1,000, Rs 5,000 and Rs 10,000 currency notes.
The government through this ordinance would be looking to bring about certainty on the estimate of money flowing into the system, as well as a cut-off date for all deposits.