India Acts To Help Farmers Hit By Black Money Crackdown

She estimates GDP growth in India could fall by 0.7-1.0 ppt (percentage point) over a year, with the maximum impact in the immediate two quarters, which will see a large contraction in effective money supply.

Indians now travelling to foreign countries exchange old denominations for the local currency, as they have no other source for exchange?

(AP Photo/Ajit Solanki, File).

The front page for November 9, 2016. During his presidential campaign, he had India as “key strategic ally” and lauded economic policies of the government saying “he wants to work with New Delhi”.

Communist Party of India General Secretary S. Sudhakar Reddy, in a statement, said Modi’s “dramatic move backfired while Indian economy is in chaos”. But what lies ahead could be even worse, some analysts say.

Indeed it is ironic that the same government which is assuring foreign capital that India will be the most “liberal economy” in the world, meaning that foreign capitalists would have complete “freedom” in their economic operations within India, is forcing at the very same time millions of its own impoverished citizens to go “cashless” for weeks on end.

Neighbourhood grocers who deal mainly in cash have offered to sell goods on credit, while some customers are bartering phone credit – bought with a credit card – for vegetables. In some cases, cash was loaded late in the evening depending on the availability of currencies from the currency chests and banks.

Up to 50,000 people are expected at the sprawling Bangalore Palace, a mock Tudor castle in southern India, to celebrate the wedding of Gali Janardhan Reddy’s daughter, who was married in a Hindu ceremony earlier in the day. Security Printing & Minting Corporation of India Ltd., whose capacity Chaudhuri estimates at 1 billion pieces a month, will need several more months to meet the 500-rupee target, even if it joins forces with BRBNM, he said.

Most working people, who are unable to visit banks for withdrawing cash, are lining up before functional ATMs to draw cash. But it failed to curb corruption, and the underground economy has grown immensely larger since then.

But to clamp down on holders of unlawfully held or untaxed cash, depositors can only make such transactions once and so the banks are using the ink to prevent them from making multiple deposits.

Home ministry officials said that enough cash is not in circulation and that’s leading to chaotic situations outside banks and ATMs.

Officials said the taxman has begun a country-wide enquiry in this regard and has issued notices under Section 133 (6) of the Income Tax Act (power to call for information) in various cities and towns of the country. “What the governments needs to preserve at this stage is goodwill”, he said. “That’s what this is going to do, I think: People will not trust the rupee”.

The Government allows every single individual to exchange money up to worth Rs. 2,000 and withdraw cash up to Rs. 24,000 per week.

As new crises kept rearing their heads, a seemingly unprepared government kept trying new ways to battle them.

So, here is a great opportunity for all of them to pay taxes.

“It’s an important moment for her parents and they wanted to celebrate the event in a way that befits the family’s status in society”.