The present move by the Modi government to demonetise high value notes of Rs 500 and 1000 is a tactical move to curb corruption and hoarding of black money by politicians, businessmen and bureaucrats, which has been hailed by the IMF, World Bank and several personalities abroad and in India.
In the US the US$ is printed in five denominations 5, 10, 20, 50 and 100 from 1935 though there also existed high value notes of $ 500, 1000, 5000, 10000. The highest value note of 1lac $ was to settle international bills.
All the high value notes were taken out of circulation in 1969 and destroyed by the Federal Reserve System. The remaining few notes mostly in $5000 and 10000 denominations still continue to be legal tender but people don’t use them and don’t part with them.
In 1969 American banking system was not developed and all the transactions took place in cash using notes of $ 500, 1000, 5000, 10000. American people were suffering because of corruption of politicians, mafia and white collor criminals. In such a situation President Nixon took this bold step which was a great blow to corrupt people and which in turn started the development of American Banking System. American people found it is very difficult to shift suddenly but in order to gain something one has to lose something. The presence of high value notes in any country is the sign of corrupt country, corrupt culture and corrupt politicians. If you ask any economist his answer will be a good country is one where all transactions happen through banking system and keeping poor people out of banking system is not good sign for any country.
Due to the appeal by the PM on November 8, 2016 the common man who has suffered a lot and put to a lot of inconvenience and is still in favour of the PM’s move. No politician can be seen in the queues in any part of the country. It is the rural poor or the urban poor who have to stand in the queues to withdraw their own money.
