New Delhi: Taking the country in sudden daze, Prime Minister Narendra Modi on Tuesday night announced demonetisation of Rs. 1000 and Rs. 500 notes with effect from Tuesday night, making these notes invalid in a major assault on black money, fake currency and corruption issues. In his first televised address to the country, Mr. Modi said people holding notes of Rs. 500 and Rs. 1000 can deposit the same in their bank and post office accounts from November 10 till December 30. He declared that the new notes of Rs 500 and Rs 2,000 with greater security features and design will be circulated from 10 November.
Mr. Modi added that for now, notes currently in use can be traded for upto Rs. 4,000 till November 24 and for larger amounts thereafter. Against notes that are deposited, withdrawals of upto Rs. 10,000 a day or 20,000 a week will be permitted for now. PM Modi, urging the country to bear with “temporary hardships” in the implementation of the new rule, said that banks will be closed to the public tomorrow and ATMs will not work in some places for the next 48 hours and withdrawals will be limited till Friday to Rs. 2,000.
This is the biggest ever crackdown on black money; a shocker to black marketers, hoarders and corrupt persons of all kind and in all walks of life. No one could have ever imagined such a bold, brave or even harsh move in the midnight when people are literally off to their respective place. Perhaps, no such emergency measure has been employed anywhere else in the world.
In the currency based economy of the country, even the daily wage earners and causal low income group workers are paid in Rs 500 and Rs 1000 denominations. They will be hard pressed to understand the new mechanism and will end up knocking on banks doors in the days to come. Small traders and hawkers have to pick goods and pay cash, to sell or to sustain their livelihood. This is such a critical condition during this wedding season where many people are on the verge of celebrations at their homes. And after this decision people have a major showdown to deal with this situation. They would not know how to react to this move or how to survive in the next few days. That is the collateral damage of the Modi government’s fight against black money. This could possibly explain why Modi was so insistent on opening bank accounts for all Indians. He may or may not have planned it that way, but the move certainly had its own merits/demerits.
The fact that a decision of this magnitude was kept under wraps, as a closely guarded secret, is a remarkable achievement on part of Modi and his select team. There was no leak, not even slightest hint of such an extreme measure. The timing of the announcement was also critical. By the time he made this announcement, most shops usually shut down their shutters; thereby, leaving no time for black money hoarders to engage in high value shopping.
The scheme of swapping of older to newer one notes(Rs500 & Rs.1000) is introduced for fake Indian currencies which are highly increasing day by day. For ordinary people, the fake notes look similar to genuine notes, even though no security feature has been copied. India remains a cash-based economy, hence, the circulation of fake Indian currency notes continues to be a menace. So for now we have to wait till the result of this declaration will come after some days, months & years as per regarding Indian Economy.