The Narendra Modi government has made its big move against black money.
By making the present Rs500 and Rs1,000 currency notes illegal from Nov. 09 onwards, the government has effectively forced the entire country to go to the banks (or post offices) and have their cash (in those denominations) added to their accounts.
It’s still too early to gauge how well the entire replacement mechanism will work, despite the 50-day window the government has announced. But this much is clear: The move will have a massive impact on the black money and counterfeiting ecosystem.
With these notes now going out of circulation overnight, the government has created a solid opportunity to clean up the system. Those hoarding cash at home—which in all likelihood will involve Rs500 and Rs1,000 notes—will have to put the money into the formal system. And terrorist organisations, which according to the government have made repeated use of fake currency, will suddenly find their cash piles containing these notes worth nothing.
India has decided to end the use of Rs500 and Rs1,000 currency notes from Nov. 09.
During a televised address late today (Nov. 08), prime minister Narendra Modi said that the drastic measure was taken to curb the flow of black money and prevent the counterfeiting of notes in Asia’s third-largest economy.
The government will issue new Rs500 and Rs2,000 denomination notes.
Account holders can deposit Rs500 and Rs1000 notes in banks and post offices over the next 50 days with proof of identification such as a PAN card or an Aadhaar card. ATMs in India won’t operate on Nov. 09 and Nov. 10 to facilitate the replacement process. Banks will also remain closed to the public on Nov. 09.
This is, so far, the biggest move made by the Modi government to stop the circulation of illegal currency in the country, which was part of the Bharatiya Janata Party’s poll manifesto in 2014. Earlier in his term, Modi had opened up an amnesty scheme, allowing people to declare their illegal wealth by Sept. 30 2016, in order to avoid legal action. By Oct. 01, only some Rs65,250 crore worth of black money was declared under this scheme.
The prime minister also emphasised on Nov. 08 that the sudden move will impact the financing of terrorist activities in India, which often uses counterfeit notes and black money channels.
“The Rs500 and Rs1000 notes hoarded by anti-national, antisocial elements will become worthless piece of paper,” Modi said. He added, for the benefit of the public, “There is no need for panic. Your money will remain yours.”
Currently India’s black money economy is about 20% of its GDP, according to estimates from Ambit Research. Apart from cash, Indians also hoard wealth worth over billions of dollars in the form of gold.
Prime Minister Narendra Modi has called an emergency address speech, where he revealed to the country that 500 and 1000 rupee notes are to be discontinued from midnight today. I know how defective decision it is but it is true and will be staunch decision of striking off usage of 1000 and 500 Rupee notes currency in India. This decision has been made by the present government under the PM who says, IMF and World Bank states India is an economic star now.
Every citizen will be allowed to withdraw 10,000 Rupees from Bank or ATM per day and 30,000 per week which seems to be less. This ban on notes can be major stroke on Indian economy but we will, have to wait and watch how it turns out to be.
Why India Banned 500 and 1000 Rupee Notes
By making the present Rs500 and Rs1,000 currency notes illegal from Nov. 09 onwards, the government has effectively forced the entire country to go to the banks (or post offices) and have their cash (in those denominations) added to their accounts.
It’s still too early to gauge how well the entire replacement mechanism will work, despite the 50-day window the government has announced. But this much is clear: The move will have a massive impact on the black money and counterfeiting ecosystem.
With these notes now going out of circulation overnight, the government has created a solid opportunity to clean up the system. Those hoarding cash at home—which in all likelihood will involve Rs500 and Rs1,000 notes—will have to put the money into the formal system. And terrorist organisations, which according to the government have made repeated use of fake currency, will suddenly find their cash piles containing these notes worth nothing.
India has decided to end the use of Rs500 and Rs1,000 currency notes from Nov. 09.
During a televised address late today (Nov. 08), prime minister Narendra Modi said that the drastic measure was taken to curb the flow of black money and prevent the counterfeiting of notes in Asia’s third-largest economy.
The government will issue new Rs500 and Rs2,000 denomination notes.
Account holders can deposit Rs500 and Rs1000 notes in banks and post offices over the next 50 days with proof of identification such as a PAN card or an Aadhaar card. ATMs in India won’t operate on Nov. 09 and Nov. 10 to facilitate the replacement process. Banks will also remain closed to the public on Nov. 09.
This is, so far, the biggest move made by the Modi government to stop the circulation of illegal currency in the country, which was part of the Bharatiya Janata Party’s poll manifesto in 2014. Earlier in his term, Modi had opened up an amnesty scheme, allowing people to declare their illegal wealth by Sept. 30 2016, in order to avoid legal action. By Oct. 01, only some Rs65,250 crore worth of black money was declared under this scheme.
The prime minister also emphasised on Nov. 08 that the sudden move will impact the financing of terrorist activities in India, which often uses counterfeit notes and black money channels.
“The Rs500 and Rs1000 notes hoarded by anti-national, antisocial elements will become worthless piece of paper,” Modi said. He added, for the benefit of the public, “There is no need for panic. Your money will remain yours.”
Currently India’s black money economy is about 20% of its GDP, according to estimates from Ambit Research. Apart from cash, Indians also hoard wealth worth over billions of dollars in the form of gold.
Prime Minister Narendra Modi has called an emergency address speech, where he revealed to the country that 500 and 1000 rupee notes are to be discontinued from midnight today. I know how defective decision it is but it is true and will be staunch decision of striking off usage of 1000 and 500 Rupee notes currency in India. This decision has been made by the present government under the PM who says, IMF and World Bank states India is an economic star now.
Every citizen will be allowed to withdraw 10,000 Rupees from Bank or ATM per day and 30,000 per week which seems to be less. This ban on notes can be major stroke on Indian economy but we will, have to wait and watch how it turns out to be.
Why India Banned 500 and 1000 Rupee Notes
No comments:
Post a Comment