Scrapped Currency Notes Hit Indian Economy – Will it have any impact on the common man?

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The midnight of 9th November ’16 will witness scrapping of Indian currency notes of 1000 INR and 500 INR following an announcement made by Mr. Narendra Modi, the Indian PM. According to his recent declaration, this move is aimed at eradicating corruption and black money.

A decision has been takento continue with currency notes of Rs. 50 and Rs. 100 as legal tender till further notice. Abolishing the old notes of 500 and 1000 INR has been a cause of concern for a large section of our population. The decision has caused all ATMs and banks to be closed for a day.

The immediate solution

An individual has the option of submitting all Rs. 1000 and Rs. 500 notes with his post office or bank accounts during the period of Nov 10th – Dec 30th. You’ll need to produce a government identity card for exchanging any amount up to Rs. 4000 till Nov 24th.

The old notes have to be accepted by airline booking counters, railways, bus ticket counters, and government hospitals for a period of 72 hours. You may even visit State government authorized crematoriums or milk booths, Central or state government affiliated co-operative stores, gas and diesel stations belonging to the public sector and petrol pumps within Nov 11th, if you want to use your old notes.

The permanent solution

The RBI is likely to issue fresh Rs. 2000 and Rs. 500 notes beginning from Nov 10th. The picture of our Mangalyaan will be featured on the new Rs. 2000 notes and the Red Fort will be featured on the Rs. 500 notes. The general public will get the new notes since Nov 10th.

For every debit card the withdrawal limit has been set to Rs 2000, which will eventually be increased by Rs 2000. You’ll be able to withdraw money the sooner our ATMs become functional again. However, all banks will see a daily withdrawal over-limit worth Rs. 10,000 per day and a weekly withdrawal over-limit worth Rs. 20,000.

In his speech, Mr. Modi has even stated that no restrictions have been laid upon transactions involving electronic funds transfer, debit cards, demand drafts, checks, and credit cards. The end objective of this move is to restrict money laundering and other activities. The government doesn’t want our citizens to suffer in any way and that’s why certain measures have already been taken to keep us from hassles.

The surprise Element

It was necessary to shake things up with an element of surprise. It prevented drug cartels from making necessary adjustments. Experts have described it as a surgical move.

Curbing inflation will certainly become easier as it brings down visible consumption. Methods that have already been tried and tested once are of no good use for us. It’s high time that the government tries some new methods to eradicate corruption and we must help them device corrective measures and put them into action.

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