Special Column by Smita Mishra: Check Mate for black money
By Smita Mishra, Founder, PoolWallet
Let me start by saying – this is an absolutely brilliant step –aptly quoted by many as a master stroke of the Modi government towards containing the big ugly giant of black money. What has happened is that the government decided that 9th Nov 2016 onwards, the existing currency (physical notes) of denominations Rs.500 and Rs.1000 will be demonetised. All currency notes up to Rs.100 continue to stay valid. These demonetised currencies currently in possession of a common man can be redeemed in their bank accounts for the equal amount (any amount) or exchanged into Rs.100 notes- upto Rs. 4000 per day. (Yes, India now has its own 9/11 to talk about in future too!!)
I am yet to find a drawback for the action taken. Yes, its bold, yes, its sudden – but that was the whole idea. Giving an advance notice for such an action and then doing it would completely defeat the purpose. India is willing to go through a little inconvenience for the greater cause.
But I do see tons of positive impact of it. Lets start with the ease of business. The moment you take away the greasing of palms, the hidden costs behind every transaction are gone. In response to this change, the cost of such transactions may get increased on the face value, for example in real estate business – where we suspect the maximum black money is consumed. But overall, the ease of business shall increase tremendously.
Ease Of Doing Business Will Get A Big Boost
Introduction of Nano GPS Chip (which can be detected by satellite -up to 120m below the ground) in every currency note of high value will ensure a huge concentration of money laying at a location other than banks, gets reported to Tax department. Movement of money can be tracked now. This change may force in more transparency. And transparency in decision making is good for business – unbiased decisions shall be made, purely on merits.
The unaccounted economy that has been built and running in parallel for so long will perish. With the current action, the huge amount of black money will either lose its value or be forced to come to the main stream thus improving country’s GDP – which directly means availability of more funds for the government initiatives. Also – this will keep all the money in future within the mainstream GDP of the nation.
Clearly, it comes as a detriment to those who did wrong in past. But its high time they did face it anyways.
Last but not the least – Terror of all sorts have forever been funded by illicit cash , counterfeit notes. This step of the Modi government is clearly a successful surgical strike on terrorism – by bringing a check on the terror funding.