Not only was a history created, but a revolution of sorts has started from November 8, 2016 for the citizens of India. The sudden decision to ban Rs 1,000 and Rs 500 sent shockwaves across the country. It is believed that this is the actual surgical strike on black money and terrorism.
Black money, corruption and terrorism have taken roots in the country, these are the major hindrance in the eradication of poverty, said Prime Minister Narendra Modi in a 40-minute televised speech to the nation on November 8.
Since the decision of banning Rs 1,000 and 500 currency notes was too fast, it has not given people either a chance to understand or cope with the situation. But why such a decision has been taken and how people will be affected by this decision are some of the questions all are boggling with.
The decision to ban these notes was taken to curb the huge unaccounted flow of black money. Modi specifically pointed out in his speech that these large-value notes were being used to finance corruption and fund terrorism. These high-value bills are used in money laundering schemes, racketeering and drug and people trafficking.
Now if one talks about how it would affect the common man, traders, businessmen and others‚ÄĒthe decision would not hurt anybody in the long-term, but, yes, it will definitely affect them negatively in the short-term. For the next couple of weeks and even months in rural areas, there will be a shortage of cash supply in the market. According to¬†media reports, more than 80 per cent of cash in the market was in the form of high-value bills so the availability of smaller denomination notes for buying daily needs would be a problem for some time now.
This move will adversely affect the unorganised sector working class such as maids, drivers, labourers etc as they mostly depend on weekly or monthly hard cash payments. Also if we talk about the timing of this step then from November 10, 2016 season of Indian weddings is going to start as per the Hindu rituals which largely depend on hard cash and gold.
1.Deposit of old currency will start from November 10 till December¬†30, 2016
2.Exchange of old Rs 500 and Rs 1,000 notes will be done at banks, head and sub post office. The limit for this is Rs 4000 till November 24
3.Limit of withdrawal will be Rs 10, 000 per day and Rs 20,000 per week
4.No restriction of any kind on non-cash payments by cheque, DD, debit or credit card or any electronic transaction
Overall, in the long term, there is no doubt that this bold step is going to solve the problem of black money to a large extent. But still, one question remains unanswered. How much black money is available in the form of gold, property and other forms in India? Hence, this step will solve the problem of hard cash black money only and not any other forms.
Also, the instant decision of government has led to the creation of many middlemen, agents who are converting high-value bills of people for less money exchange.
Another question the people are asking is s that if high-value bills were the source of black money, then why is the government launching Rs 2,000 and Rs 500 currency notes. The answer may be is that there is still need of cash in business and Rs 2,000 notes might help. Also, the new note will be printed in limited amount and with a more secure design, which will make it tougher to bring out counterfeit notes.
Anything which is so quick and fast will take some time to sink in. Only time will tell how this decision will work and affect the people in the long term.