Overnight ban on 500 and 1000 Rupee Notes – Indian Black Market Economy Doomed
The Indian government unprecedentedly decided 8PM today 7th November 2016 to ban two largest currency notes, the decision shocked everyone in India, no one knew this could even happen in a country like India where decisions by government are slow and calculated. The prime minister Mr. Modi announced the news himself. This decision would lead Indian economy unstable for several months, but might benefit India in the long term, as billions of dollars worth currency are hidden in the form of black money majorly by large unauthorized organizations and political parties.
Estimated a few Trillion dollars, maybe more than the US government. It is estimated 40% of the total wealth in the Indian real estate business is black money.
Swiss bank has $ 1.4 Trillion as black money deposits in Indian currency.[ref]
According to Social Media and a few news channels:
Swiss bank revealed India has more money than rest of the world.
The second best Russia has 4 times lesser deposit. U.S. is not even there in the counting in top
five! India has more money in Swiss banks than all the other countries combined!
The reason of this decision by the government
- To stop corruption all of a sudden, even if it extremely slows down Indian economy for months
- To stop use of counterfeit currency reported to have been spread by terrorists
Much of Indian money is black money, it is unaccounted and illegal, the money is in the form of
- 500 or 1000 Rupee notes
7 November 2016 PM Modi announced that 500 & 1000 rupee notes are now invalid and won’t be accepted as a currency, this decision was unknown, and most of this money actually belonged to either large businessmen or major politicians. In India it is openly known that almost all politicians are cons and have a lot of illegal black money.
This is an extremely bold step by the government of India, with benefits in long term, this actually might create a widespread disagreement in people, as much of Indian economy belong to this category. Most wealthy and powerful people of India have major part of wealth as black money. Even much of larger Indian companies have allegedly been trading black money. Some very large organisations, worth billions of dollars entirely fall under the illegal category.
It will be interesting to see the effect of such a huge event in the world’s largest democracy.
The possible implications of this decision
- Massive Deflation
- Land and property cost about 40% reduced, almost 40% of land value in India is black money
- Increase in value of Gold and precious metals for a few days
- Sudden shift in Indian economy
The government of India will definitely benefit from the decision, as tax paid might increase to a great extent.
The Video is not in English Language
Modi Government in India took this step in order to stop corruption and launch a new form of tax, which will take care of many illegal activities going on in the country, just a few months before the implementation of this tax, Modi’s BJP decided to drop an equivalent of nuclear bomb on India’s black market economy.