Pieces of Paper: Demonetisation of Rs 500 and Rs 1000 Notes Explained
Why ban Rs 500 and Rs 1000 notes? In two words: Black Money. Unaccounted money, often used in any form of corruption or illicit deals, usually takes the form of high-value notes, which in this case are the Rs 500 and Rs 1,000 bills. In his speech, Hon’ble Prime Minister Mr. Narendra Modi specifically pointed out that these large-value notes were being used to finance corruption and fund terrorism. The Financial Action Task Force, a global body that looks at the criminal use of the international financial system, notes that high-value bills are used in money laundering schemes, racketeering, and drug and people trafficking. In India, the Rs 500 and Rs 1,000 notes also constitute a huge percentage of the money spent by governments, political parties and candidates during general elections. A Centre for Media Studies report showed that nearly Rs 30,000 crore was spent during the 2014 general election, while official spending only accounted for Rs 7,000-Rs 8,0...