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Old money notes banned - black money eliminated

While the world is still coming to terms with Donald Trump as the President of the United States, Asia has been rocked by a sensational move made by the Indian government.

For those who think that corrupt businessmen and politicians can deposit their hoarded cash in the bank and easily get the new currency, here’s the deal breaker: All the money henceforth deposited by citizens into their bank accounts will be scrutinised by the government. People who deposit suspiciously large amounts of money, especially when their bank account has otherwise not had much credit, will be questioned. If the person is unable to adequately explain, through documentation and such, how they earned the money, then they will be heavily penalised. Not only will they have to pay tax on the excess and unaccountable money, they will also be charged  200% penalty fee. In short, they will be left poorer than before!

Many believe this is a historic moment for India, which is otherwise notorious for having corrupt officials. Modi’s move to ban currency notes overnight, and to issue new currency, is a huge war on black money in India. Many feel this is the beginning of change for the country, and era that finally ends corruption.

How does this affect the Indian economy? India already has one of the world’s most populous and young workers, and with Narendra Modi’s move to eliminate black money, India could very well be on the path to becoming a developed country soon.

We will now have to wait and see how this move by the India goverment affects global markets, and what it means for India’s trade partners. However, it is safe to say that this single masterstroke could probably wipe most most of the money passed on through corruption! Like many say, the 21st century is truly an Asian century!

Image credit: DonkeyHotey/flickr