Tuesday, November 08, 2016

Cashless Society. India Demonetizes Currency

 It is a habit carried over from my life in India  i always carry some currency in a hidden pocket of my wallet
it has come in handy sometimes.

But the best way to get rid of black money is to go for a cashless society .


But unless this happens all over the world it will not achieve it's purpose.
As long as  there are bankers  and small countries  trying to make a fast buck  by being a haven for illegally  gotten wealth no amount of demonetization will work
it may have some  shock and  awe but it will go the same  way  of US shock and  awe  in iraq
only to find  ISIS.

this was the opinion of then  RBI governor on Demonetization in 1978

H.M.Patel recalled in his book Glimpses of Indian Economic Policy: an Insider’s View, that when finance minister H.M. Patel informed him about the decision to withdraw high-denomination notes, he had pointed out that such exercises seldom produces striking results.
Most people, Patel said, who accept illegal gratification or are otherwise recipients of black money, rarely keep their ill-gotten earnings in the form of currency for long.
The idea that black money or wealth is held in the form of notes tucked away in suitcases or pillow cases is naive, Patel said. In any case even those who are caught napping or waiting will have a chance to convert notes through paid agents as some provision has to be made to convert at par notes tendered in small amounts for which explanation cannot be reasonably sought, he added.

No comments: