Indian currency decree does little to root out ‘black money’
Surprise 2016 attempt to root out illegal hoards of cash stumbles as nearly all currency removed has come back into financial system, reserve bank says
Modi announced in a November 2016 television address that all 500-rupee and 1,000-rupee notes, then worth about US$7.50 and US$15, would be withdrawn immediately from circulation.
The banned notes could be deposited into bank accounts but the government also said it would investigate deposits over 250,000 rupees, or about US$3,700. The government eventually released new currency notes worth 500 and 2,000 rupees.
In theory, the decree meant corrupt politicians and businesspeople would suddenly find themselves sitting on billions of dollars in worthless currency, known here as “black money”.
“A few people are spreading corruption for their own benefit,” Modi said in the surprise nighttime announcement. “There is a time when you realise that you have to bring some change in society, and this is our time.”