New Delhi –Â Over the past few decades, the peopleÂ of IndiaÂ Â used to save hundreds of thousands or even millions of rupees in cash in the form of bills of 500 rupees and 1,000 rupees.
Various transactions conducted in cash by the people of India to make their money had never been taxed.Â That is why it appears the nickname ‘black money’ or black money.
However, now the government wants the tax on property in the form of cash hoard them.Â The strategy is to force the people to ‘pull out’ of their property by removingÂ banknoteÂ Â denominations of 500 rupees and 1,000 rupees which is the highest denomination in India.
Instead, the government will release bills 500 rupees and 2,000 rupees with the new security features.Â Not explained why the withdrawal of 1,000 rupees, it was replaced with a higher denomination.
However, some institutions are still using the old banknotes to 24 November as government-owned hospitals, transportation and other public services.
Inevitably, the people in the land of Hindustan also must exchange their old money with new money.
Elimination of 500 rupees and 1,000 rupees was announced by the Prime Minister ofÂ IndiaÂ , Narendra Modi on 8 November.Â And immediately sparked a furor.
PM Modi asserted that policies aimed at addressing corruption, illegal possession of cash, and money laundering.
People also flocked to the banks to change their money with smaller denominations or a new denomination.Â The government set the deadline is December 30, 2016 exchange.
For the middle class, they are only allowed to change up to 250 thousand rupees without having to provide proof of tax payment.Â Some of them chose to pay the poor, exploiting their accounts as an intermediary for the exchange of money.
Meanwhile, some are choosing to go to a jeweler and designer boutiques.Â They begged to be able to shop with old money.
“They feel, ‘it’s better to have beautiful clothes than to change my money into a toilet paper’,” said Executive Director of Ensemble Group, an upscale clothing store owner
“Some people show up with a suitcase filled with cash. They asked our staff to pretend that the purchase has been made the day before the money is removed, but the staff we reject it,” said skelter.
Some of them chose surrender rather than to engage with tax investigations.Â They chose to fill pillowcases and bags with the old currency before being thrown in the trash.Â Not long ago sheet 1,000 (equivalent to US $ 15 dollars) was found floating in the River Ganges.
Approximately one third of the entire business in India using black money.Â Call it like residential, commercial, luxury retail and vending services wedding supplies.Â Everything is reported to have fallen sharply following the enactment of this policy of withdrawal of banknotes.
Indian citizens are willing to queue for hours to exchange their old money with new banknote denominations of 2,000 rupees.Â Or they could draw 2,500 rupees from automated teller machines (ATM) each day.Â But not infrequently they queue in vain because the bank runs out of new banknotes.
On Friday, India’s Supreme Court has rejected a claim opposing the policies of Prime Minister Modi said.Â MA said that people are panicking and this case may indicate a serious problem.
On the other hand, the Chairman of the Banking Association of India said that the whole of the national bank will limit the exchange of money for elderly residents and their clients so that bank staff they can focus on the normal operation of the banking system.
Analysts said the Indian economy is very dependent on ‘black money’ and the attack on it could cause serious problems.
“In a market economy like India, where corruption has been rooted and durable, there’s no way to put the reforms without any significant disruption in the short term,” said a professor of economics at Cornell University, Eswar S. Prasad.