New Delhi's approach to its monetary troubles has been in shambles, at least for now. In its bid to substitute around $220 billion, the entire population has grown weary and angry for failing to get their money's worth.
As of late, more queues continue to surface at various Indian banks as people become desperate for cash. While the shortage has been attributed to a limited number of automated teller machines (ATM) dispensing money, another major reason points to the faulty units whose main problem is the incompatibility of the new currency forms the government has recently released.
It has been revealed that the 2,000-Indian rupee note, which is equivalent to about $30, has been demonetized. However, technical difficulties have emerged due to the legal tender's smaller frame. ATM machines nationwide have run into trouble of processing an item that doesn't match its system.
According to Finance Minister Arun Jaitley, it will take around two to three weeks before modifications in the banking structure will become fully functional. The Indian government official has also held back his views with regards to the belief that the new monetary procedure will somehow alleviate the country's cash-dominated transactions in the coming years.
Meanwhile, the Reserve Bank of India has requested all people not to amass the legitimate currency.
In his stirring speech, Prime Minister Narendra Modi has called on the nation to spare 50 days for the currency change program to battle black finances. He believes that, in time, money will be recovered from the hoarders.
As all of the nation's 500 and one thousand rupees lost their values, it has been accounted that 86 percent of the currency in circulation have been invalidated.
The shift in monetary form is necessary considering that the stockpiling of underground finances or cash untaxed and earned through illegal activities has driven the legal financial system in disarray. Moreover, the process is vital since it will reduce the dependability of people on a purely cash legal tender.
It is being anticipated that trades and businesses will adopt transactions other than those involving ready assets only. It is troubling to note that with total currency being the main medium for dealing, tax evasion and unlawful undertakings are proliferating.
Former World Bank Chief Economist Kaushik Basu has another take on the matter. He believes that the Indian government has miscalculated the risk of taking cash tender out of circulation on just a short notice. The previous administration's economic adviser further adds that small businesses have been unsettled which led to an economic growth upset.
