Tuesday, 28 February 2017

Demonetisation not the first time

India pulling bank notes from circulation
".. Narendra Modi may have shocked the nation with his Nov. 8 announcement, but the prime minister’s move was hardly unprecedented. India has pulled select denominations of its currency twice before.
The first was when Rs1,000, Rs5,000, and Rs10,000 notes were taken out of circulation in January 1946, a year and a half before the country won independence from the British. The Rs10,000 notes were the largest currency denomination ever printed by the Reserve Bank of India, introduced for the first time in 1938. All three notes were reintroduced in 1954.
In the early ’70s, the Wanchoo committee, a direct tax inquiry committee set up by the government, suggested demonetization as a measure to unearth and counter the spread of black money. However, the public nature of the recommendation sparked black money hoarders to act fast and rid themselves of high denominations before the government was able to clamp down on them, Mint reported. .."
".. For the most part, Modi’s measure mirrors Desai’s—except this time, he has the backing of his RBI governor, Urjit Patel, who applauded Modi’s “very bold step” addressing concerns about the “growing menace of fake Indian currency notes.” But that doesn’t mean all the skeptics are off his back. Economists doubt the impact of his decision. .."

Find this at http://qz.com/831674/rupee-currency-demonetization-a-brief-history-of-india-pulling-bank-notes-from-circulation .

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