Demonetization – What’s the point of demonetization when most of the black money is hidden in different assets or in foreign banks ?

 

Black Money has to be seen in two different context.

1. Un-accounted cash in Indian currency notes
2. Assets bought by un-accounted money

  

Let’s look at both of them in detail.

Demonetization – Effect of change of currency notes size !

The real reason of why the new Rs 500 and 2,000 notes were changed is known only to Modi and his team. Even if they disclose it at a later date, politicians and large section of pubic might, as usual, will not accept it citing some or other reason. Nevertheless, we can as usual speculate on what change in note size means:

Demonetization - What about cost of printing and distributing new notes?

 

Many experts have aired their views on why demonetization is not sensible considering the high cost involved in entire logistics of printing and distributing the new currency notes in such a short time. Let’s try to understand how much it costs government and RBI to print these new notes.

Media reports says that logistics of printing new Rs 500 and Rs 2,000 notes itself is more than Rs 12,000 crores.

Why is Demonetization good for India ?

While this summary of Narendra Modi’s demonetization might not be fool proof without holes, logically and expectations per say, it does makes sense.

Modi current plan attacks following things

1.      Terrorism (be across border or internals like Naxals, Mafia, etc.,)

2.      Counterfeit (fake) Notes

3.      Black Money

4.      Economy

5.      Opposition - other “dishonest” political parties