The recent efforts by the Indian government to reform what has traditionally been known as a “cash economy” have thrown daily life in India into a tumult, Bloomberg reported Thursday.
As has been widely reported, the removal of the 500-rupee and 1,000-rupee notes from circulation and legal tender status has been aimed at hitting tax evaders. It has been estimated that unaccounted funds in fact comprises one-fourth of the nation’s economy. The repercussions of removing the notes from circulation have been widespread.
The newswire reported that Indian defense jets have been used and are being used to bring money — tangible money, that is, in the form of new currency — to widespread corners of the country to thousands of vaults, which are then transported to bank branches. There have reports of cash shortages in some locations within India. Bank employees are working longer shifts to help exchange the new notes, which come in 500-rupee and 2,000-rupee denominations, for the banned ones. But those notes, said Bloomberg, do not fit within the trays held in ATMs — and all of the 220,000 ATMs in the nation must be reconfigured.
The newswire also reported a surge in big-ticket, expensive purchases, with Indians looking to park unaccounted cash in valuables such as luxury watches. Many put money directly into gold jewelry.
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