A Cashless Future Is The Real Goal Of India’s Demonetization Move

“This is a public sector innovation unthought of in history. A cultural-economic revolution in the making!” exclaimed Monishankar Prasad, a New Delhi-based author and editor, about India’s demonetization initiative and subsequent drive towards developing a cashless economy.

The biggest problem with India suddenly removing 86% of its currency from circulation without having an adequate supply of new notes ready to take their place is that fact that India is more reliant on cash than almost any other country on earth. Suddenly, hundreds of millions of people were left without the means to engage economically, to buy the things they wanted and needed, and myriad businesses were left without a readily available mechanism to receive payment for their goods, to buy supplies, or pay their staff.

India’s demonetization scheme was a unilateral initiative that was planned in secret — in a back room of Prime Minister Modi’s home, in fact — by a small group of insiders tied-in with the upper echelons of India’s government. The strategy was to instantly nullify all 500 and 1,000 rupee banknotes, the most common currency denominations in the country, and then eventually replace them with newly designed, more secure 500 and 2,000 rupee notes. This endeavor instantaneously became policy when the prime minister announced it via a surprise television address at 10:15 PM on November 8.

One of Modi’s main brands is that of a corruption fighter, and his demonetization initiative was rushed into effect in an attempt to catch the black market off guard — which could potentially lead to a big payday for the central bank if large amounts of illicit cash wasn’t redeemed. That plan flopped, as almost all of the recalled notes were officially accounted for one way or another.

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