Demonetisation of currency has been the boldest reform to hit India which the poor believe has been an equaliser
12/31/2016 3:02:06 PM
|written By : Ashali Varma|
On November 8, 2016, two significant events took place. In the US, where I was, Donald Trump was elected as President and in India, PM Modi had taken a gigantic step towards erasing corruption and black money from our economy.
The Indian PM’s announcement that by midnight Rs 1000 and Rs 500 denominated notes would become worthless. This has been a very bold step that agigated the corrupt but not the common man. Imagine if you have crores stashed away, which many in India have -- they can hardly take it to the bank to be exchanged!
I salute the Prime Minister for this amazing step and was amazed how TV anchors added to the panic. In his speech on Doordarshan, the PM had clearly said that cheques, credit cards and bank drafts would be valid, only cash was affected. But they were worried about how they could only get Rs 4,000 a day at the ATM. Actually this is an adequate amount to run a home and I do wish the TV anchors had done their homework.
One of the outcomes of this is that Pakistan’s counterfeited terror money won’t work anymore. So in one stroke Modi has destroyed all the counterfeit Rs 500 currency that Pakistan sends India. This is a huge blow for the separatists and the terrorists - it is in effect a huge surgical strike on Pakistan and other terror organisations.
In addition, as the PM said in his speech, only the dishonest will be affected and all Indians should rejoice as it will not only knock out the huge black money economy but also the funding that comes into our country for terror strikes.
Another benefit will be that inflation will go down on food and other essentials that were hurting the poor and the lower middle class the most. Black money led to inflation not only in essential services but also in real estate where many who wanted to buy a home had to pay a large portion in cash. This hiked up prices of real estate as well as food supplies.
Corruption will also come down as people will be wary of taking huge amounts in cash. In fact this will help to encourage more people to start bank accounts and make payments by cheque or credit cards. The poor will also benefit as they will have to pay less for food and the tax avoiders will have to start paying income tax! As India has a huge base of tax avoiders this is also a win-win situation to get more citizens to pay their taxes.