On November 8th when the world was glued to US presidential elections, the prime minster of India declared that Indian currency notes of denomination ₹500 and ₹1000 were no longer valid from 24:00, Nov 8th. The news spread like wild fire across the nation. People thronged towards different ATMs to withdraw money of amount ₹400 per transaction so that they could get ₹100 notes many ATMs ran out of ₹100 notes.
The following day was declared as bank holiday and then the banks were supposed to be open even on weekends. From November 10th one can see huge ques across all the bank branches and ATMs across the country. Many ATMs are shut down for the want of cash. 84% of the printed currency was in form of ₹500 and ₹1000 notes that are out of circulation now.
It is a fact that the neighbouring countries of India are circulating counterfeit currencies in mostly of denomination ₹500 and ₹1000. The move to recall this notes will make the counterfeit currency useless. There are many bureaucrats, corrupt government officers, unscrupulous businessmen who have loads of black money hidden as cash in form of notes of ₹500 and ₹1000.
However many black money holders have hidden their black money abroad in tax havens like Dubai, Switzerland, Singapore, Panama, Malta etc. Many have them locked in form of gold bars and jewellery. So these people won't be affected by the decision taken by the government.
While the decision was necessary poor planning in implementing this project has created chaos across the nation and common man of the country is the one who is worst affected. To begin with proper arrangements were not made and extra counters were not opened for people to exchange notes. Many people in India don't have bank accounts specially in villages, where the nearest bank branches are many kilometers away, they have their lifetime of savings in form of these notes which they can't use immediately.
It is said that this move was made to fight the menace of black money, however new ₹500 and ₹2000 notes are being introduced. So again the government is making it easy for the corrupts to keep their black money safe. Again the current ATMs are not calibrated for the the new notes, so people are unable to withdraw the new currency notes from the ATMs.
On November 9th many major national dailies had a front page full advertisement of an online app based money transfer app company which sported the picture of the prime minister of India. Now the declaration of banning the notes was made at around 8pm by Prime Minister. At 10pm the newspapers went for print. So if indeed the operation was confidential then how come within 2 hours such arrangements can be made. There is clear indication that the people close to the ruling party knew beforehand that such a decision was coming and they made all the necessary arrangements to overcome any situation of their unaccounted cash becoming useless.
It is clear that out of the 14.5 lakh crore worth of notes in circulation before demonetization. A very small proportion of unaccounted cash will be collected by the government. Maybe around Rs 1 lakh core or a little more. However what matters is how the money is used. It is highly likely that the money will be stolen again and very little will be achieved by this move. Since the current ruling party and government does not have any interest in eliminating corruption because it is gaining from it and they are in politics to make money from corruption rather than serve people.
The following day was declared as bank holiday and then the banks were supposed to be open even on weekends. From November 10th one can see huge ques across all the bank branches and ATMs across the country. Many ATMs are shut down for the want of cash. 84% of the printed currency was in form of ₹500 and ₹1000 notes that are out of circulation now.
It is a fact that the neighbouring countries of India are circulating counterfeit currencies in mostly of denomination ₹500 and ₹1000. The move to recall this notes will make the counterfeit currency useless. There are many bureaucrats, corrupt government officers, unscrupulous businessmen who have loads of black money hidden as cash in form of notes of ₹500 and ₹1000.
However many black money holders have hidden their black money abroad in tax havens like Dubai, Switzerland, Singapore, Panama, Malta etc. Many have them locked in form of gold bars and jewellery. So these people won't be affected by the decision taken by the government.
While the decision was necessary poor planning in implementing this project has created chaos across the nation and common man of the country is the one who is worst affected. To begin with proper arrangements were not made and extra counters were not opened for people to exchange notes. Many people in India don't have bank accounts specially in villages, where the nearest bank branches are many kilometers away, they have their lifetime of savings in form of these notes which they can't use immediately.
It is said that this move was made to fight the menace of black money, however new ₹500 and ₹2000 notes are being introduced. So again the government is making it easy for the corrupts to keep their black money safe. Again the current ATMs are not calibrated for the the new notes, so people are unable to withdraw the new currency notes from the ATMs.
On November 9th many major national dailies had a front page full advertisement of an online app based money transfer app company which sported the picture of the prime minister of India. Now the declaration of banning the notes was made at around 8pm by Prime Minister. At 10pm the newspapers went for print. So if indeed the operation was confidential then how come within 2 hours such arrangements can be made. There is clear indication that the people close to the ruling party knew beforehand that such a decision was coming and they made all the necessary arrangements to overcome any situation of their unaccounted cash becoming useless.
It is clear that out of the 14.5 lakh crore worth of notes in circulation before demonetization. A very small proportion of unaccounted cash will be collected by the government. Maybe around Rs 1 lakh core or a little more. However what matters is how the money is used. It is highly likely that the money will be stolen again and very little will be achieved by this move. Since the current ruling party and government does not have any interest in eliminating corruption because it is gaining from it and they are in politics to make money from corruption rather than serve people.
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