Narendra Modi surgical strikes: 10 effects of black money crackdown in India
Los angeles : On November 8, when the world was looking forward to understand the US elections 2016, India’s Prime Minister Narendra Modi hit a master stroke with his surgical strike on black money.
The PM’s decision was hailed by some and criticized by many. Twitter took to jokes while several pondered over what to do next with their Rs 500 and Rs 1000 currency notes.
Done and over with the controversial decision on black money, now what one should expect later. We list down a few consequences:
Illegal money: The Black money held in cash in the form of 500, 1000 rupee notes will be rendered worthless after December 30, 2016 thus forcing money hoarders to find new and innovative ways to stash ill-gotten wealth.
First victim- Indian housewives: It is no surprise that for years a housewife stashes away her savings in the form of cash in some corner of the house. Often concealed from the husband and other family members, it becomes her treasure, to be used as and when she pleases. It is also researched that obsolete notes account for 86% of all currency notes in circulation which has now become worthless.
Long ATM lines: Soon after the decision, huge queues were spotted outside ATMs in the country. The banks which were to remain closed were suddenyly givien notices of remaining open. It was announced that banks will also dispense banknotes of Rs. 50 denomination. Currently, the lowest denomination note a customer can get at an ATM is Rs. 100.
Markets take a roll: The domestic market might witness a kneejerk reaction on Wednesday, but the long-term benefits are immense, say experts.
Jewellery sales to be impacted: Long queues were seen outside jewellery stores on Tuesday night as consumers tried to convert their Rs 500, Rs 1,000 currency notes to gold. However, now even jewellers are reluctant to accept the notes now that they have been scrapped by the government.
Retail estate to be hit: The housing sector will be hit as nearly half of all property transactions are believed to be black money and benami transactions. Notably,, prices of property is already hitting the trough.
Blow to Elections: Punjab and UP are going to polls soon and Mr Modi’s step will be a big blow to election funding. Nearly 16 billion Rs 500 notes and 6 billion Rs 1000 notes are in circulation currently.
RBI’s trail: The biggest bank of India will have to bear a cost in excess of Rs 10,000 crore to print fresh Rs 500 and Rs 2,000 notes to replace the existing Rs 500 and Rs 1000 notes.
Car market and others: All those sectors which involve bulk of the transactions like in the used car market will be hit. The used-car sector usually settles deals in cash payments, chunk of which is believed to be black money.
Travellers nightmare: The sudden decision has caught many commuters and travellers unaware especially with those travelling via railways or flights as they will have to double check their pockets before travelling. And, those who have been out of town will certainly have a hard time paying for their bookings and rental fares. It is often noted that people usually carry debit cards or bigger currency notes like Rs 500 and Rs 1000 while commuting or travelling.