Economy

What Cash Clean Up Means For Rural India

What Cash Clean Up Means For Rural India

Earlier, Prime Minister Pushpa Kamal Dahal "Prachanda" and Finance Minister Krishna Bahadur Mahara through telephonic conversation had urged their Indian counterparts to arrange exchange facilities in Nepal as Nepalese have a large stock of Indian 500 and 1,000 bank notes.

Stacked one on top of the other, the pile would be 300 times the height of Mount Everest.

India is grappling with a new challenge after Prime Minister Narendra Modi ordered the country's larger banknotes withdrawn from circulation.

The 500 and 1000 rupee (Specified Bank Notes - SBNs) have been demonetised from November 9, 2016 in a crack down on black money.

Many will also be turned into briquettes for industrial use, while some could be converted into paperweights and other decorative or functional objects.

The Bloomberg report says the $27 billion global bank note industry is dominated by Asian countries with Europe coming in second and Africa-Middle East region in the third position.

Some of the notes, especially those that carry the signature of the highly respected former central bank governor Raghuram Rajan, are being sold at twice their face value on websites such as those run by EBay Inc. There are also rumours that tax rates may fall. Since then, banks and ATMs have been serpentine lines for depositing, exchanging, and withdrawing legal tenders.

Though the government has asked hospitals not to refuse old 500 and 1000 rupee notes, there are several reports of patients facing such issues.

While the Government is doing its best to increase the availability of new currency notes, it may be worthwhile to consider special relief measures similar to those employed at times of national calamities to serve the poorer segment of the population for their daily needs and for enabling emergency healthcaref medical treatment in smaller hospitals.

His successor Arun Jaitley, in charge of overseeing the move, said such estimates are "highly exaggerated".

India's cash crisis is forcing consumers and shop owners to embrace long-resisted digital payments. The amount includes cash kept in the vaults of banks, financial institutions and the central bank.