Bye Bye Black Money

The sudden demonetisation is being seen as a surgical strike on black money. How will the move impact the economy? Charanjit ahuja analyses the situation.

- Charanjit Ahuja

First came the surgical strike on terror launch pads across the borders and now it is time for surgical strike on black money. By demonetising high-value currency notes of  ₹500 and ₹1,000 as legal tender, Prime Minister Narendra Modi has struck hard at the root of the twin problem of black money and fake currency. When the Prime Minister explained the measure, pointing to the imagery of corrupt officials stashing ill-gotten money in their mattresses and cupboards, he left nothing to imagination. He made it clear that black money is not only fuelling inflation but also aiding terrorism. It seems to be a step towards a cashless economy and just the first step to curb corruption.

Modi struck an instant chord with common people, particularly the middle class, when he pointed out that it was indeed difficult for honest taxpayers to buy a dwelling unit or roof on the heads of their families because of skyrocketing real estate prices. It is no secret that the real estate sector flourishes on black money and most property transactions are with a motive to ‘adjust’ black money. Prime Minister made his intentions clear a couple of days later when he said that detractors of the demonetisation move, especially the Congress leaders who especially those involved in mega scams, are now standing in queues to exchange ₹4,000 and announcing that more anti-graft measures were on the anvil including action against benami property.”