Prime Minister Narendra Modi, has announced the withdrawal of Rs 500 and Rs 1000 denomination notes with effect from midnight. While addressing the nation on television on Tuesday he stated that this was clearly done to curb the growing black money issue which deprives the government of its legitimate revenues.
While the current government seeks to put an end to corruption with the scrapping of these notes, is it really targeting to curb the black money issue? Or is there other rational behind it?
While it is more likely that such a tenacious decision at this point in time could possibly be taken to address the terrorism issues. Clearly, with these denomination notes not being in circulation anymore, it would hamper any terrorist activities which are underpinned with any sort of black money.
For the next 72 hours the institutes like Government hospitals, railway ticket booking counters, ticket counters of government buses, airline ticket counters at airport, petrol, diesel and gas stations authorized by public sector oil companies, consumer co-operative stores authorized by state or central government, milk booths authorized by state governments, crematoria and burial grounds will continue to accept Rs 500 and Rs 1000 notes for payment.
For the convenience of the public, these above measures are announced. But, such a short notice of the banks being closed on 9th of November would still lead to few hassles for the public, as it is also intimidated that ATM’s will not work on 9th November as well as on 10th November.
New notes of Rs 500 and Rs 2000 will be released and circulated from 10th November 2016 onwards. These notes will differ from the old notes in terms of look, design, size and color. Also, the NGC technology is used for this purpose. Every Rs 2000 note will be embedded with the Nano GPS Chip, which makes it easy for the currency note to be tracked. Thus, it helps to eradicate black money menace.
The old notes of Rs 500 and Rs 1000 can be deposited in the banks up till 30th December 2016. Anyone who misses this deadline can further get the notes changed till 31st March 2016 by furnishing any ID Proof.
While, the current government backs this as a measure so as to fight corruption, black money, terrorism & counterfeit corruption. Is this how it should be looked at? With a decision that can impact the entire economy, it could well be appreciated or be anticipated as killing two birds with one stone.
Though it is not yet clear if the Modi government, has begun its re-election campaign by taking such a stringent action, it is more likely to turn out to be a double-edged sword, as they should be able to deal with any kind of retaliation from the public concerning this action. Seems like, the Modi government is yet again trying to strike the emotional chord with public by taking such a decision at a time when India ranks 76 in Corruption Perception Index.