This is bad news for the majority of India’s workers, who are paid in cash.
Prime Minister Narendra Modi has decided to discontinue the use of Rs 1000 and 500 notes by midnight.
In a response to curb the ongoing issue of black money, Modi has televised his decision to remove the legal tender by Thursday the 9th of November 2016.
Modi will introduce new 500 and 2,000 notes on Thursday. Notes already in use will have to be traded for up to 4,000 until November the 24th.
The banks will subsequently be shut, and ATMS will not issue any money. This is because time is needed to implement the change. However, for India’s labour workers, this is bad news. They are paid predominantly in cash.
The PM has spoken out about corruption and black money within India. He stated that they are: “The biggest obstacles to our success.”
Just after the UK PM Theresa May made a visit to India, Modi told the country of his decision. He spoke of the 1.25 Crores of black money that has been discovered. He plans to combat the issue of illicit money laundering, and corrupt payments within the country.
In a report by the KPMG (2011), it is stated that government officials collected bribes. Taxes are failed to be collected, since the desire to pay very little is reflected upon the losses of the country’s economy.
Also, N R Narayana, founder of Infosys called Modi’s decision a: “Masterstroke.” He expressed his admiration of the PM’s move against corruption. He said:
“The Prime Minister is working hard to reduce corruption. Black money is a scourge on any developing economy.”
Founder of Paytm an e-commerce business, Vijay Shekhar Sharma also expressed his joyful response: “This is a golden age to be a tech entrepreneur in India. Keep the money digital.”
However, not everyone is as sure as to the ban’s effectiveness in the country. The impact on the laboring people of India will be a negative period of unrest.
As Congress Vice President Rahul Gandhi said: “The real culprits…are sitting tight.” Whilst the lives of small traders, and people with small incomes are: “Thrown into utter chaos.”
Although, India’s economy is growing increasingly, according to PM Modi. He is hopeful the ban of Rs 1000 and 500 notes, will bring about an economy more equipped to deal with corruption.