On 8th November 2016 8:00 PM prime minister of India Narender Modi announced that old 500 rupee and 1000 rupee notes will be discontinued in 4 hours. I checked my wallet and found out that I had one hundred rupee note, a fifty rupee note and five 10 rupee note. So only 200 rupee with me. The banks and ATMs were shutdown for next day 9th November 2016 so I need to survive on 200 rupee only. Although patrol pumps, Hospitals and Medical Shops were allowed to accept 500 and 1000 rupee notes till 11th November 2016.
Luckily Mar car had enough patrol for next few days not everyone have a car to commute. Many people travel by auto and taxis for them 200 rupee will not be sufficient even for a day. This step of government was necessary for curbing black money and counterfeit notes so I thought that it is right step even if it create some inconvenience to people. Banks opened on 10th October 2016 but ATMs were closed. Banks were exchanging up to rupee 4000 per person. I asked my wife to go to bank and get the money exchanged but she could not go to bank due to heavy rush in the bank. I still thought that banks and government are doing their best to serve people and at least some people are getting money. But later I came to know that banks are giving two 2000 rupee notes for 4000 rupee. A 2000 rupee note is too big a denomination to bring liquidity into market. 500 rupee notes are already out of market and for converting a 2000 rupee note to change 20 hundred rupee notes will be required. If a person buy 200 rupee products from market he will get 18 hundred rupee notes in return. Shopkeeper will not be having that much change. So 2000 rupee notes are bringing no liquidity to market.
For first few days government should issue only 100 rupee notes and new 500 rupee notes in market to restore liquidity into market but it is doing opposite of it. This is wrong and government should have planned better. It is issuing 2000 rupee notes into market. 2000 rupee notes should be issued later on when government raises withdrawal limit on bank accounts. Some people are saying that great economists have taken this decision and I don't understand economics so I should not criticize decision of great economists. But I feel that these economist who feel that 2000 rupee note with curb black money and 500 rupee note will encourage corruption are fools. Economics is not rocket science which only few people know and kept a top secret. Economics is something which everyone understand. Issuing 2000 rupee note for first few days is a bad decision and it is producing liquidity crunch in market.
Now few thing on how I am surviving with 200 rupee. I borrowed 600 rupee from my son's piggy bank. One of our neighboring shopkeeper is still accepting 500 rupee note and we are buying milk from him. This might be illegal but it is necessary for maintaining liquidity in market. I support government's decision to change the currency note but government should infuse liquidity in market by issuing 100 rupee and 500 rupee notes instead of 2000 rupee note.
Luckily Mar car had enough patrol for next few days not everyone have a car to commute. Many people travel by auto and taxis for them 200 rupee will not be sufficient even for a day. This step of government was necessary for curbing black money and counterfeit notes so I thought that it is right step even if it create some inconvenience to people. Banks opened on 10th October 2016 but ATMs were closed. Banks were exchanging up to rupee 4000 per person. I asked my wife to go to bank and get the money exchanged but she could not go to bank due to heavy rush in the bank. I still thought that banks and government are doing their best to serve people and at least some people are getting money. But later I came to know that banks are giving two 2000 rupee notes for 4000 rupee. A 2000 rupee note is too big a denomination to bring liquidity into market. 500 rupee notes are already out of market and for converting a 2000 rupee note to change 20 hundred rupee notes will be required. If a person buy 200 rupee products from market he will get 18 hundred rupee notes in return. Shopkeeper will not be having that much change. So 2000 rupee notes are bringing no liquidity to market.
For first few days government should issue only 100 rupee notes and new 500 rupee notes in market to restore liquidity into market but it is doing opposite of it. This is wrong and government should have planned better. It is issuing 2000 rupee notes into market. 2000 rupee notes should be issued later on when government raises withdrawal limit on bank accounts. Some people are saying that great economists have taken this decision and I don't understand economics so I should not criticize decision of great economists. But I feel that these economist who feel that 2000 rupee note with curb black money and 500 rupee note will encourage corruption are fools. Economics is not rocket science which only few people know and kept a top secret. Economics is something which everyone understand. Issuing 2000 rupee note for first few days is a bad decision and it is producing liquidity crunch in market.
Now few thing on how I am surviving with 200 rupee. I borrowed 600 rupee from my son's piggy bank. One of our neighboring shopkeeper is still accepting 500 rupee note and we are buying milk from him. This might be illegal but it is necessary for maintaining liquidity in market. I support government's decision to change the currency note but government should infuse liquidity in market by issuing 100 rupee and 500 rupee notes instead of 2000 rupee note.
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