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India's Demonitization

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Ghyda On February 11, 2020




Anaheim, California
#1New Post! Jun 12, 2018 @ 20:03:27
"On November 8, 2016, India’s Prime Minister Narendra Modi shocked the nation by announcing the immediate “demonetization” of the two largest rupee currency notes (Rs 500, worth about $7.50, and Rs 1000, worth about $15). Noteholders would have only 50 days to turn them in for new Rs 500 and Rs 2000 notes. The move, Modi promised, would sharply penalize holders of unaccounted “black money,” namely tax evaders, bribe-takers, professional criminals, and terrorists. Their currency hoards would become worthless — a welcome one-time wealth loss — or they would expose themselves to detection by trying to swap or deposit large batches. Anyone depositing a large sum in old notes would face scrutiny by tax authorities."

The article says that India's economy runs on a half-cash, half-checking-account economy, which makes illegal activity (tax evasion, corruption, etc) easier.

CATO

https://www.cato.org/blog/indias-failed-demonetization-program-its-retreating-economic-defenders
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