India’s surgical strike on black money
The demonetization of 500 and 1000 currency bill is a historic step taken by the Prime Minister of India Narendra Modi and Government of India in November 8th 2016 to fight against black money, fake currency bills and corruption issues in the country. The announcement was made by The Prime Minister of India Narendra Modi in a live TV address to the nation at around 8.30 p.m . This is The boldest decision ever taken by the Prime Minister of India. The withdrawal of the currency bills will help to stop flow of the fake currencies to the Indian economy from Pakistan. Intelligence agencies like IB and RAW says majority of fake notes are coming from India’s neighbour nation Pakistan, it’s a major threat to Indian economy.
Words of famous economic specialists
“This is the boldest and the biggest step by the government for containing black money.
It is like a surgical strike on black money, corruption and fake bills” — Dr Hasmukh Adhia revenue secretary tweeted
“Citizens must understand, cooperate & join the fight against corruption,” “the step is another move to attack the biggest menace facing the country”. — Finance Secretary Ashok Lavasa tweeted.
“At a single stroke, a large volume of black money will become defunct. But in the long run, this is going to have an adverse impact on commodity prices. Because even though we are reducing money supply, the market will be having
same kind of transactions and hence price will increase.” — Economist ISI, Dipankar Dasgupta tweeted
Main Points from the speech of PM
1. The currency bills of 1000 and 500 denominations will not be legal beginning November 9
2. New currency bills of RS 2000 and RS 500 will release soon
3. People can deposit Rs 500 and RS 1000 currency bills by Dec 30
4. Currency bills of Rs 500 and Rs 1000 will be just paper with no value
5. Banks will remain closed on November 9th 2016
6. ATM’s won’t work on November 9 2016
7. People can deposit currency bills of Rs 500 and 1000 in their banks from November 10 till 30, December 2016
The impact of this move and who is going to suffer?
1. Black money holders
2. Fake currency distributors
This demonetization of 500 and 1000 currency bill will definitely affect India’s stock market, banking sector for next some days.