When India’s Prime Minister, Narendra Modi, announced that 86% of his country’s currency would be “just worthless pieces of paper” in a matter of hours, he immediately boosted his reputation as the scourge of tax-evaders and the corrupt. Unfortunately for everyday Indians, the hassle of adapting to the sudden change is bigger than many expected.
The policy demonetises 500 and 1,000 rupee notes, which Indians are now expected to change at banks and ATMs. This is an attack on what Indians call “black money”, cash that has been concealed from the tax authorities and/or used for criminal activity; it’s also meant to curb the spread of counterfeit currency. But it’s unlikely to achieve much – and ultimately, it’s at least as much a political move as it is an economic one.