Published: Mon, November 21, 2016
Economy | By Melissa Porter

India Acts to Help Farmers Hit by Black Money Crackdown

It's been over a week since the demonetisation move came into place and the situation is far from normal. The repercussions were similar with people dying of shock, exceptionally long lines at the bank and the middle classes being hit.

By Our Representative A influential worldwide business news giant, based in NY, avidly followed by the corporate world across the world, has said that India's "sudden" decision to demonetize 500- and 1,000-rupee notes on November 8, initially seemed a "masterstroke", is proving to be a "grave miscalculation". Finance Minister Arun Jaitley said that it would take two to three weeks to re-calibrate the machines, according to the Financial Times.

People outside a bank in Gurugram. And an official said that the government has stepped up printing of new Rs 500 notes.

After the abrupt and drastic move by the India government imposing ban on high denomination currency notes, Indians raced to deposit over 478.68 billion rupees ($7.1 billion) of money at State Bank of India as citizens lined for quite a long time to deposit or trade the old bills and ATMs ran dry. Many banks have already indicated likelihood of reduction in their deposit and lending rates in the period ahead.

The genesis of "black money" in India started in the 1970s when personal taxes were extremely high, which forced people to hide their income and seek ways to generate more funds and not pay tax on them. An eight-year-old died after her father was unable to pay for the petrol while rushing her to a hospital. According to the latest report, the death toll due to demonetisation now stands at 47.

There was a surge in demand for luxury watches after Modi's sudden announcement as wealthy Indians rushed to make costly purchases with unaccounted cash. A large number of my countrymen want to be honest. Unaccounted money makes up almost a fourth of the economy. But Kalpesh Mehta of Tribeca, Trump's India partner, mentioned that Trump's kids knew about it and they termed it as an "incredibly bold move". "Some jewellers even had to call the police to organise the crowds", Mr Chirag Thakkar, a director at gold wholesaler Amrapali Group, said by phone from Ahmedabad in Mr Modi's home state of Gujarat. Now, we have Modi Antoinette who says: "If you don't have paper, use plastic'".

That adds to the worries of a government battling to keep cash-dispensing machines running after efforts to ease withdrawals failed to keep pace. The Government lowered the exchange limit for now-defunct Rs 500 and Rs 1,000 notes to Rs 2,000 from the existing cap of Rs 4,500, effective Friday.

The Government allows every single individual to exchange money up to worth Rs. 2,000 and withdraw cash up to Rs. 24,000 per week. Some banks offer something called foreign currency accounts, but they are often for high premiums, only for competitive foreign currencies, and require vetting processes for high level investors in the worldwide market.

"Crop loans are sanctioned by various bank to farmers".

Since Nov. 8, more than 30 people have lost their lives because of heart attacks while waiting in line or from suicides related to the stress of accessing cash, the Indian Express reported on Wednesday.

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