Black Money – Domestic and International Efforts

[op-ed snap] Making legal tender illegal-Good step but bad implementation

  1. Context: 500 and 1000 denomination notes no longer remain a legal tender
  2. Withdrawals from ATMs limited to Rs.2,000/day for next few days; returning bills to banks will require some form of government ID
  3. Step taken to deal with “the disease” of unaccounted income—or “black money”
  4. Across Asia, countries are moving away from high-denomination notes- Korea plans to go cashless by 2020- so as to curb the menace of black money
  5. Problems a common man would face: Tougher for small businesses and for poor
  6. ATM cards or mobile payments in India have not percolated far enough thus making transactions difficult for the poor
  7. Demonetization of this kind was necessary, but pushed too soon
  8. Hasty implementation: We first need private sector to create the cheap and easy mechanisms for cash transfers using smartphones before going cashless
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