On November 8th, 2016, the PM Narendra Modi led BJP government took the entire nation by surprise by announcing that Rs. 500 and Rs. 1000 notes would not be legal tender from that day forth. Ever since the announcement, people all over India have been rushing to ATMs and banks to exchange or deposit their money. They have stood in serpentine queues every day to do so. Some people became frustrated by this move and criticized PM Modi for making the life of common man and working professionals difficult. A lot of opposition parties were also quick to pounce on this drawback. Rahul Gandhi, Arvind Kejriwal and Mamta Banerjee ware among those who criticized the move. They promised to take this issue up in the parliament’s winter session, which promises to be a stormy one. They said that a major scam was being implemented in the name of fighting black money. They said that the new Rs. 2000 and Rs. 500 notes that are being printed are of poor quality and that very few ATMs have been recaliberated to print these new notes. In response to their criticism, PM Modi gave an emotional speech in Goa on 12/11/2016. He said that he had left behind his family, to do good for the nation. He said that people who have crores of black money with them will only have high value denominations like Rs. 500 or Rs. 1000 notes. By making them invalid, people who have black money will be forced to deposit them in banks. He further said that if people with black money, reveal and deposit their black money in banks on or before December 30th, 2016, they need only to pay 45% tax on their black money and no questions about the source of their black money will be asked. On the contrary, if people who have black money, who do not reveal or deposit their black money, are caught, then they would not only be questioned about the source of the money but could also be imprisoned for life! It is a way to deter other people from indulging in corruption and black money, he said. PM Modi also said that the inconvenience caused by this move is only temporary and requested that Indian citizens bear with him for another fifty days after which he promised that not even a black mosquito would exist in India! He said that he understood the hardship, people of India were going through at the moment and said that he had initiated this move, not to show off his authority and power as the PM, but to do greater good to the people of India by eliminating black money from the Indian economy. Read more on Black Money
To further ease the temporary inconvenience caused by the move, PM Modi, on Friday (17/11/2016) hit another sixer, by announcing that people will be able to withdraw cash upto Rs. 2000 from even petrol bunks from then on! This is a good move. People will be able to withdraw Rs. 4000 instead of only Rs. 2000 everyday and would also be able to withdraw cash while putting fuel for their vehicles. PM Modi added that this facility is available in 2500 petrol bunks right now but would be available in more than 25,000 petrol bunks form November 30th onwards. PM Modi said that people only need to enter their ATM PINs at debit card processors for them to be able to withdraw their money. However, we feel that some arrangements have to be made at petrol bunks for this move to be effective. Firstly there have to be separate queues at petrol bunks for people only wanting to withdraw cash and for people who want to put fuel to their vehicles as well. Lastly there have to be at-least two persons handling the different queues for effective processing of transactions. If this is implemented then the move would be effective at relieving the temporary stress caused by the demonetization of Rs. 500 and Rs. 1000 notes. Else there would be utter chaos at petrol bunks and possibly even accidents with people and vehicle drivers clashing with each other to withdraw money. It would also cause a lot of delay for drivers wanting to re – fuel their vehicles.
Demonetization of Rs. 500 and Rs. 1000 notes is good move to curb black money because people who have crores of black money will only have high value denominations like Rs. 500 or Rs. 1000 notes. If they are invalid people will be forced to deposit them in banks to get access to legal currency notes. However, there is also the fact that black money exists with people in other forms other than hard cash. People possess black money in the form of gold, silver, shares or they have it in the form of foreign currency stashed abroad. Those forms of black money are more difficult to retrieve and the government of India must take steps to retrieve them as well. Although how PM Modi would do it, nobody knows. We are all eager to watch him hit the third six! The fist six being the demonetization and the second six being, people being allowed to withdraw money at petrol bunks as well! Read more on Startup News