” ₹1000 Bills are no longer legal tender in India”
I’ve been waiting to see India’s Prime Minister, Narendra Modi, make some of the big changes that he talked about when he got elected. On Tuesday, November 8th, Modi delivered.
In a surprise move, Modi’s government demonetized; that is, invalidated the ₹500 and ₹1000 notes, which are a staggering 49% and 39%, respectively, of the cash in circulation in India.
By doing this, Modi struck against illicit activity in the Indian economy. The black market, corruption, and terrorist cells rely on both real and fake bundles of these bills.
Criminal organizations may hold most of their cash in these bills, but so do poor farmers. The government has ATM machines and banks so honest people can exchange their cash. The problem, however, comes from the sheer number of these notes. Nearly 90% of the money in circulation in India needs to be exchanged for new, high security bills.
Modi’s opponents, led by the Congress party, have criticized the litany of logistical headaches the demonetization has caused. The Prime Minister has made impassioned speeches in defense of his new program, calling it an effort to rid India of “70 years” of corruption.
Despite significant pressure, Modi has taken action.
In an age of populist politics, it’s reassuring to see politicians put the interests of the people before their own.