Prime Minister Narendra Modi on Tuesday made a massive announcement that will shake the country upside down. He has said that the bank notes of denomination 500 and 1000 will be deemed illegal from the midnight of November 8. He said that those who have existing bank notes of 500 and 1000 will be required to exchange them at banks and post offices between November 10 to December 30. Though it will be hugely inconvenient to the masses and may also lead to chaotic situations, it is still a drastic measure to curb the menace of black money and counterfeit currency notes.
This is PM Modi’s biggest and boldest move against black money. This will also be a decisive move against corruption. Apart from curbing financial crimes, this move will also be a sucker punch to the financial channels that funnel money to terror groups and anti-India syndicates.
Prime Minister Narendra Modi correctly pointed out that black money, corruption, and terrorism were the main enemies of the country. The RBI also repeated that black money was being used to fund terror activities.
This is not the first time that a demand to do away with notes of the higher denomination was being made by anti-graft crusaders. Various governments in the past have considered the feasibility of the drastic step. However, to have the stomach to make such a bold move that can lead to the risk of nation-wide chaos clearly shows Prime Minister Narendra Modi’s resolve to end the menace of black money. PM Modi wants concrete action against black money at any cost.
What was the need of this move?
In 2012, the CBI estimated black money stashed abroad to be $500 billion. Some reports say that the amount is 50 trillion US dollars. To bring back the black money, Modi government announced Income Declaration Scheme under which 45 per cent in tax and penalties of the amount disclosed was to be charged. After the first quarter of the Income Declaration Scheme ended on September 30, Finance Minister Arun Jaitley, last month, said that 64,275 declarants collectively disclosed Rs 65, 250 crore. This money is nothing if we compare it with even government’s estimates of black money stashed abroad. The government needed to do something big because the amount of money stashed abroad is enormous. It would be difficult to judge as of now whether this will bring back all the black money. But, this move clearly shows that PM Modi will not stop the efforts until he is in office.