It has come as shocker and surprise announcement that our Honourable Prime Minister of India, Mr.Narendra Modi made on 9/11 about Demonetisation. Firstly I should applaud his bold move and not many would have this guts!

We have seen in movies that the black Money will be kept in big sack and hidden in many places like underground, under the bed, etc. Contrary to our belief, it is not the case anymore. Black money lives in the form of foreign currency, share market stocks, precious metals (gold, diamond), immovable assets like farm land, properties, big bungalows, etc. Even the Panama law firm published a list recently confirmed that more than 500 Indians were using safer tax havens to safeguard their black money. Swiss leaks list had over 1100 Indians and we were only witnessing them. It is evident that big chunk of money has been hidden in many countries in various forms. Sadly these people are sitting comfortably at home and watching TV and people who work hard every day for a living are standing in long queues in belief that they are contributing for a good cause.

Let us say banning Rs.500 and Rs.1000 notes might help us eradicate Black money in some way. But let us try to find answer for these questions?

1. What is the percentage of Organised vs Unorganised sector in India?
2. We know majority of people work in Unorganised sector. Their salary and other transaction happens through hand in hand. For instance, when you purchase a load of eggs it will cost around Rs.25,000 to Rs.40,000 depending on the market rate. That person will have the money in hand and we cannot ask him to keep Rs.100 notes for the whole Rs.40,000 which is not safe. In case he has Rs.500 and Rs.1000 notes, for his hard earned money, how will we account and change the old notes?
3. Let us leave Chennai and there are still many villages where the farmers harvested money are collected in cash. How can we ask them to do NEFT/RTGS/IMPS?
4. Share markets were considered as Organised sector but can we even stop black money rotation? When the Rs.500 and Rs.1000 were banned, do you think all those who had black money will surrender and apologise?
5. We have to consider that Rs.500 & Rs.1000 are circulated more than any other denomination. In a country like India where we have Unorganised, Non-banked jobs and possibilities are high, cash flow will be high. Can we even say due to this cash flow, black money is high?
6. For small business owners, this will affect badly. For example, tomorrow morning in order to receive vegetables that come from other states to Chennai Koyambedu market, Small business owners have to get loan from private financiers for high interest rate and be ready with few lakhs at 3am. Have we regularised how they should transact these?  Until we focus on each sector and help them organise the transactions, they will only have Rs.500 & Rs.1000 notes to pay for the goods.
7. Salaried class people will save few Rs.500 and Rs.1000 notes in their home as part of monthly budget and they may not spend that money. House wives still save some money in spice boxes inside kitchen. Some may save Rs.1000 notes to pay for chit fund. How are we going to account these type of transaction?

Are the above people belong to Criminals category? Less than 10% from this huge population has looted crores of black money and these innocent people have to stand in queue to prove they do not have black money, is this any good?

Most of the Government officials know who owns Black money, but still they leave the matter as if they were not aware. It continues to be a dream and we get to see Black money holders getting arrested only in movies. Lawmakers leave them free and choose to make the entire nation to stand in queues like criminals and troubling their routine.

Politicians could afford to go every single home in order to get votes but not to change these notes now? It would have been lot easier and convenient for people if Government appointed people to go every home and change the currencies. All these long queues and troubles caused could be avoided.

What are we going to do for such transaction in Unorganised sectors? Let us clearly think about all these and then come up with new initiatives. Without working on grass root level, it is absolutely waste to just bring up new policies.

Please feel free to share your opinion and comments below. Also share this post with your friends, let us bring more awareness!

Disclaimer: I am sharing view from a common man’s perspective. I am not supporting any political party or any politician in this post. Also this post is not pointed towards anyone, just a general analysis and possible suggestions.

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