There is a huge chaos in India since the moment the Prime Minister Mr. Narendra Modi had declared the ban of 500 and 1000 Rs. notes on 8th November which started reflecting since mid night post 9th November. The anarchy is obvious and genuine because first of all not everybody actually understood what was it. At first they misunderstood this in entirely different manner, which was the notes are all useless just like a trash, which is not so.
The motto is clear – To end the corruption and smuggling through using fake notes. If someone has extremely huge amount of cash he is at a huge risk since (s)he is not in the condition to answer the government how did (s)he manage to earn that amount in bulk despite of low/medium figure salary. Corruption exists everywhere, in each country residing in the world; the thing is that it’s just the least and most corrupted that comes into the picture responsible for either rising or failed economy because of personal interests.
As far as smuggling is concerned it could be an exchange of money with drugs or even weapons that allow the terrorists to establish illegitimate activities across/within the borders or anywhere inside the country such as mass murders. The weapons not necessarily are bought using real black money in cash but via fake currency as well. The step is taken to minimize such things much as possible. Without currency funding the anti-national activities cannot occur.
Since people do not have much of the valid cash they are bound for few days to purchase via only credit/debit card transactions or via cheque or net banking. Everyone doesn’t have a bank account and government obviously cannot ignore the individuals living in the rural areas who are either illiterate or have little to no knowledge about card transactions, or both. This is why the government has planned to take no tax from the farmers.
Most individuals wasn’t aware of the fact as well and so there are cases where nobody was accepting these currencies. This overly populous country is open to believing false rumors as well. One of the small towns in northern part of India believes that Rs. 10 coins aren’t legal either which certainly has no relation with the reality. I am not talking about the educated citizens who constantly turn on the news channels for the latest updates but those at the rural places where public transport is the only means to travel across the villages, and no other medium to communicate other than talking in person.
The corrupted individuals who have tons of money in their homes are no longer ‘rich’ since it is practically impossible to create hundreds of accounts and bifurcating specific amount to each. One cannot hold huge amount even in different bank accounts since RBI can track record the individual and question him/her regarding the whereabouts of each money transaction.
There are also cases of people buying gold within 48 hours of the news since they had no other option to hide their wealth. This made the value of these assets to significantly higher amount, roughly starting from Rs. 30,000 to Rs. 80,000 per 10 grams within 2 days! Those who have the business of Real Estate cannot take cash payment for may months and so the value of land and property will remain under control, making everything cheaper. The land and property solely depend on the current demand. It accordingly rises and falls based on the individuals’ requirements. Shares are already down; the economy will be down for around 200 days and will come back to normal after that.
Most ATMs don’t contain money for now. The banks where closed the very next day since the announcement. Another point to be put up is the dimension of the notes that are just introduced by the Reserve Bank of India. These aren’t compatible with the existing ATMs. The bank employees patiently deal with the crowd, no matter how many of them make a queue. It is just the matter of quite for a while till everything gets normal.
Most people have this hue and cry of not informing this earlier since nobody was mentally prepared for the decision except for few officials having renowned positions at central government. A common man obviously faces minor drawbacks but if they were to inform in advance everybody would be knowing, so how come one stop illegal activities happening on large scale? This is important to never make underworld mafias aware so that they get caught or at least don’t make huge deals.
The RBI hasn’t yet cleared the fact (or fiction) whether or not the new Rs. 2000 note contains RF chip inside; that most social networking websites are circulating. If facts are to be believed the claim cannot be real since a large database will need to be maintained to get the physical location of each currency. The GPS system installed will have its own money value, say Rs. 100 for each note. Does it sound practical to have a Rs. 2000 note having an actual value of Rs. 2100?
This is not the first time since already the ban of Rs 1000, 5000 and 10,000 notes occurred in January 1946, one and a half year before independence that were re-introduced again in 1954. Most economists believe that it may affect the upper middle class sections but not the biggest fish due to the reason that they have their penny reserved in foreign banks under someone else name. The measures are done to protect the rights of a common man with a positive intention. But only the future will clarify the picture whether this will be a successful step.