Indian Prime Minister Narendra Modi has, in what many call a bizarre move, banned the use of Rs 1000 and 500 notes. The ban is part of a bid to tackle the blight of ‘black money’ or counterfeit money as well as corruption and money laundering.
Modi announced in a televised statement that Rs 1000 and 500 notes will be replaced by new Rs 2000 and 500 notes. The now illegal notes already in circulation will be traded for as much as 4000 and then be considered void by November 24th. The Rs 1000 and 500 make up roughly four fifths of India’s currency, meaning this bold move could have a dramatic impact on the nation’s largely cash run economy.
Modi had previously stated that corruption and black money was “the biggest obstacles to our success” and spoke of an alleged 1.25 Crores of illegal money discovered in India’s circulation.
N R Narayana, founder of Infosys, said: The Prime Minister is working hard to reduce corruption. Black money is a scourge on any developing economy.” He called the tender ban a “masterstroke.”
Not everyone is happy with the decision however, especially India’s large labourer workforce. These workers are paid largely in cash and will likely face stalled payments among other complications due to the Modi’s decision to freeze all banks for a period of time in order to allow for the change. Further complications have arisen in the form of abnormally long queues for ATM machines as a result of widespread public panic.
