PM Narendra Modi Surgical Strike on Black Money
Question in detailOn November 8th, at 8 PM, nation came home to a watershed moment in history of Indian politics. PM Narendra Modi was on all TV channels, announcing his surgical strike- as many call it, on black money. He declared that after 12 AM midnight of November 8th, all notes of denominations of 1000 and 500 will become invalid. Till December 30th, Old 1000 and 500 notes can be exchanged with new 2000 notes and notes of other denominations. ATMs would only dispense INR 2000 to each card holder in a day for the next few days. There were many other technical points, but the gist was: If you have money stashed somewhere, you either submit it to the banks (and pay penalty and slew of other charges over it), or write it off! They wouldn't be more than piece of papers.
The fallout of this decision is manyfold and it wouldn't be possible to discuss all of those here. It needs a book. I don't come from a finance background and I don't consider myself finance savvy either. So, I am as good as any other Indian in my response to this decision of our Prime Minister. I will try my best to summarise how I feel about the latest developments going around me:
- Will it drive out the black money and bring it into the system? This was an instinctive question. Well, there is no denying the fact that those who have crores and crores of cash hidden somewhere will have more distorted lines on their forehead than the others. They will have to think if they are better off throwing the money off, declaring and submitting it into the banks, or take some other devious routes to get something out of their hard earned black money.
- Will the masses be effected by this decision? Common people will suffer the most. Long queues infant of ATMs and Bank branches are testimony to this. Markets where people are interface have come to a standstill. Distribution channels have been severely impacted. In between all this, there are those who say they are more than happy to brave this out and then there are others who are cursing the government. The ratio between the two is hard to tell at the moment.
- Is this step well timed considering UP and Punjab elections are nigh? Hmm One theory is, since BJP is in power it alerted all their people to take necessary actions regarding their black money. So, they are in the clear and they will have cash which is accounted for. The opposition, on the other hand, was caught off guard. Now, they won't have sufficient funds to fight the elections which would give a clear edge to BJP! How much of truth it has, only time will tell
- Are we moving closer to a cashless economy? Is this a step taken in the direction of becoming a cashless economy or this is a flash in the pan to scare off BJP's political opponents and score big in the upcoming elections. Does Modiji have serious intentions to flush out black money and make an average Indian like me richer? We, the people would pray from almighty that it be the case!
Finally, there is no denying the fact that there are questions galore. But that is on the expected lines. After all, this concerns 1.26 Billion people. If it turns out to be even 50% of what PM Modiji is promising, we are in for some 'Achchhe Din' ahead. Finally ...
How do you see PM Narendra Modi's step to demonitize the Indian economy by banning 1000 and 500 notes?