Countering Corruption

[chaitanya]

Government of India just announced they are taking the 1000 rupee and 500 rupee currency notes off the market. These are the highest value currency notes in the country. All the black money stored at anyone's house would be in these notes only. From midnight today (in 2 hours) these notes have no value.

[POTKC]

Yes, I've already read about this. In keeping with India's recent tax-evasion amnesty. That seems like it could cause severe problems and/or bankrupt people who keep their savings in cash, though...

[chaitanya]

There is a 50 day window to deposit the money to your accounts. But people wont be able to deposit lakhs and crores of rupees. An average household keeps a maximum of 1 lakh rupees. If you have black money then your house would have somewhat between 10 lakh to over 100 crore rupees. They wont be able to deposit this amount. It would go up in flames.

[POTKC]

But what if you just really hate banks and keep a lot of money? Also, am I right in my knowledge that lakh is 100,000 and crore is 10,000,000? In that case, one lakh is just over 2.5K USD. I can imagine someone - higher-income people, yes, but still - having much more than that in a safe or something. Surely there must be better ways of fighting black money than straight-up wiping out people's reserves? Yes, people with black money would lose it, but this affects everyone else as well...