Modi Government bans Rs 500 and Rs 1000 notes to curb corruption: Analysis

Rs 500 and Rs 1000 notes will cease to be legal tender from November 8 midnight, Prime Minister Narendra Modi announced in a televised address to the nation.

Here are highlights from his speech:

– From midnight, the Rs 500 and Rs 1000 will cease to be legal tender.

– The 500 and 1000 Rs notes can be submitted to the post offices and banks from 10th November to 30th December.

– Those who can’t submit the notes within the deadline, can exchange it at Reserve Bank of India by providing a declaration.

– On November 9 and in some places November 10, ATMs will not work.

– For 72 hrs, until Nov 11 midnight special arrangements made. All government hospitals will accept old 500 & 1000 notes.

– RBI’s proposal for new Rs 2000 note has been accepted.

– On November 9, all banks will remain closed for public work.

Source: Hindustan Times

Analysis:

This is an analysis of the decision by the Modi Government.

Benefits:

• This will help to curb corruption because most of the black money is there in the denominations of 500 and 1000.
• Fake currency notes get flowed into the economy in the denominations of 500 and 1000. This will help to curb this fake note flow from the other countries.

A major critical analysis to follow.

By:

Litson K Stephen