By Vivek Kaul – The Vivek Kaul Letter (India) –
Politicians and surprises don’t go together.
They don’t like to do things which are totally different from things that are already being done.
They don’t like to spring a surprise on the voter.
And given this, prime minister Narendra Modi’s late night TV broadcast on November 8, 2016, in which he announced the decision to demonetise Rs 500 and Rs 1,000 notes, came as a total surprise.
From the midnight of November 8, 2016, these notes are just pieces of paper, without any purchasing power.
The reasons for doing this and the positive impact the decision is expected to create, have already been well explored by now. (You can read my pieces on this here and here).
In this edition of the Letter I would like to take the issue forward and look at some short-term negatives as well as what more needs to be done in order to tackle the massive amount of black money that is present in the country.
Black money is essentially money that has been earned either through corruption or through legal means, but on which tax has not been paid.
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