Prime Minister PM Modi’s surgical strikes on blackmoney by banning Rs 500,Rs 1000 old notes is creating sensation across the country. With in 27 days, bank deposits came close to Rs 14 lakh crores of banned notes and experts predict that it will reach Rs 17 lakh crores notes by Dec 30.
Many feel that black money hoarders in fact successfully laundered their blackmoney into white and this is not good a good sign. They feel more deposits than the available money before demonetisation weakens the financial architectures and increases government liability. This development exposed the claim of unearthing black money with opposition attacking that government attracted more black money than preventing it.
Demonetisation increased pressure on Rs vs USD and it increasing oil prices will hurt the economy affecting ruling BJP and PM Modi and immediate affect will be in Uttar Pradesh elections. Many feel that Finance Minister Arun Jaitley, Finance Secretary Ashok Lavasa and Chief Economic Advisor Arvind Subramanian were not consulted except for Reserve Bank of India Governor Dr Urjit Patel and Economic Affairs Secretary Shaktikanta Das.
Long queues outside banks and ATMS and people running out of cash is not good sign for PM Modi and BJP and PM Modi should do something quickly before situation goes out of hand.
