This is the current state of the demonetization in India
It’s been a month since India’s demonetization initiative, while some of us think it’s to fight corruption others argue that it was being done to help turn the black money into white money. Everyone has their own opinion on this initiative taken by India’s Prime Minister Narender Modi.
Before we move on to it’s effects right now, let’s talk about demonetization. So what is demonetization? It is an act of stripping a currency unit of its status as a legal form of exchange. There are multiple reasons why nations demonetize their local currency. Some reasons include to combat inflation, to discourage a cash system and in our country’s case, to combat corruption. At least thats it was supposed to do. The process can be carried out in two ways: introduce new notes or coins of the same currency or completely replace the old currency with new currency.
The Indian government chose to demonetize the 500 and 100 rupee notes, the two biggest denomination notes. These notes have accounted 86% of the country’s cash supply. According to the government, their main goal was to get rid of counterfeit currency, fight tax evasion, eliminate black money gotten from money laundering and terrorist financing activities, and promote a cashless economy.
By making larger value notes like the 500 and 1000 rupee note worthless, people and entities with tremendous aggregates of black money gotten from parallel money systems were compelled to change over the cash at a bank which is by law required to gain tax from the element. In the event that the entity couldn't give verification of making any tax payments on the money, a tax punishment of 200% of the tax owed was forced to be paid. The demonetization process has also repaired India's counterfeiting problem for the near to medium-term. It was previously estimated that 250 out of every million Indian bank notes were fakes. So how is it going now in India?
In the recent weeks no less than a dozen of episodes were accounted for from the nation over where authorities have recouped money stocks which kept running into multiple crores. While a probe has been propelled into these cases, a greater amount of such are surfacing.
On 12th December 2016, at least 1.5 crores were recovered from the residence of a in Guwahati-based businessman. Raunak Ali Hazarika, DIG of the Assam Police CID claimed that they have so far recovered new currency notes 2000 and 500 adding up to 1.5 crore rupees from the residence of Harjit Singh Bedi, a businessman who own a restaurant and bar in the city. The businessman claimed that he had the the proper documents to prove it was not black money, but the DIG asked the Income Tax department to examine the case.
The income tax office had likewise seized unaccounted cash to the tune of Rs 1.56 crore from different branches of Integral Urban Co-operative Bank Limited in Jaipur. Of this, almost Rs 1.38 crore was in the new Rs 2,000 and Rs 500 notes.
In a comparative episode on Tuesday, Enforcement Directorate authorities have seized Rs 93 lakh in new cash notes in Bengaluru. Seven individuals, who are accepted to be agents have been captured regarding the occurrence. They were captured by ED authorities acting like potential customers needing to trade their old money. The gang is said to have links with bank administrators and they were purportedly taking 15 to 35% commission for trade of notes.
More than Rs 250 crore in recently presented coin notes after demonetization has purportedly been seized in various assaults completed in various parts of the nation in recent month.
In the interim no less than 16 kg gold biscuits covered up in child diapers were recouped from the Indira Gandhi International Airport in Delhi after a gathering of passengers who have arrived from Dubai were caught by security offices on 12th of December. The two groups who have been caught comprised of a couple and baby each from Surat.
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