Just when I thought the 8th of November could shock no more, the Prime Minister of India, Narendra Modi, announced something that left the subcontinent speechless. In four hours, at the stroke of midnight, Rs 500 and Rs 1000 notes (86% of the cash in circulation!!) would be void. I must have spent that entire day with my jaw on the floor. Everyone crowded around the television, listening to the commentary on this radical move towards fighting corruption. That buzzy feeling of history being made, electrifying the air.
As soon as we found out, we (along with the rest of India) checked our wallets to see how much legal tender we had left. We thankfully had enough Rs 100 notes to tide us over. To add an extra twist, the first day of the notes being withdrawn from circulation was a bank holiday. When the banks did open, and the old notes could be exchanged, there were long queues and a general sense of panic.
For a week after the announcement, there were concessions (originally to the 11th, extended to the 14th) to try to avoid chaos and disaster and give everyone the opportunity to get some cash. Rs 500 and Rs 1000 notes would be accepted in hospitals, public transport, petrol stations, burials grounds and milk booths. Well, being unable to have chai, a disaster in itself.
Many are outraged by the inconvenience, restrictions on how much one person could withdraw daily and the waiting times at the banks. Many Tourists, who do not have Indian bank accounts, struggled to exchange their notes at airports. Those abroad with voided currency started to panic (if you are one of them, read this). Sadly, rumours and misinformation have spread like wildfire, leading to innocent victims.
Why take Rs 500 and Rs 1000 out of circulation, and why such short notice?
This was a bold move to tackle black money gained through corruption, tax evasion and to wipe out the fake currency from circulation. Last year, we withdrew a Rs 500 note, only to discover it was fake! The timing was strategic, so no one had time to invest their black money elsewhere.
I am no economist or political analyst, but this feels like a positive leap in the right direction, eliminating so much black money in one fell swoop. Yes, it’s been chaotic and inconvenient, and I am glad I wasn’t a tourist in India on the 9th of November. Our Rs 100 notes didn’t last long, yesterday we only had Rs 20, but our local daily needs shop gave us credit. Right now, all we can do is support each other, reassure anyone who has been misinformed and help those who can’t make it to the bank.