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Showing posts from December, 2016

Cashless Economy - The Key To A Reform

Despite every government efforts, demonetisation has turned out to be a failure. Not just because its implementation was disastrous, but because a black market has evolved to convert black money into white ridiculing this ‘bold’ and ‘historic’ move. I have summarized in my previous post why just demonetisation cannot end corruption or even black money.

It must be noted that demonetisation has been implemented before it could leak out to the media sources. There must have been a large workforce for printing a huge number of notes in such a small time and for other preparations to enforce this plan smoothly. The new ₹2000 note had already begun leaking on social media as everyone could not remain silent for a long time. That probably explains why this decision has been taken in some haste and the government and RBI of not being ‘fully prepared’ for this move resulting in a cash crunch.

But, it's good that what began as demonetisation has now been transformed into a cashless revolut…

Indian Rupee Demonetisation: Why It Cannot End Corruption Or Even Black Money

It was November 8, when Prime Minister Narendra Modi, in a dramatic announcement, decided to scrap or demonetise two high-value Indian currency of the denomination of ₹500 and ₹1000. It means 85% of currency in circulation will no longer be a legal tender. All that precious notes have been converted into wastepaper overnight. It became the biggest talking point in every Indian household — from Kashmir to Kanyakumari and from Kutch to Arunachal Pradesh. After all, in a country where 98% of all transactions are conducted in cash, it was a big jolt.

Demonetisation is usually associated with degrading economies and hyperinflation and often done by military dictatorships. It was surprising that a popular and democratically elected prime minister of a booming economy has resorted to demonetisation.

Black money is the money held by people that have evaded taxation. It is illegal hoarding of unaccounted money which tends to exacerbate inequality because the biggest evasions occur at the top …