❓Ask Duta: Effect of new currency scheme

  |   India News

The withdrawal of ₹500 and 1000 notes printed before Nov 8 2016 by the Modi Govt. is not expected to cause cash crunch or affect the Indian ₹ in the long-term though in the short-term the ₹ felt the effect immediately the day after the announcement when it fell by 18paise

The real estate market, which has traditionally seen a lot of black money flow in it, hopefully will see less of black money involvement. It is expected that short term the real estate market may experience some jitters but on the longer term it should stabilize out.

It should be noted that the withdrawn notes themselves are being reintroduced in phased manner and likely in lesser circulation when it comes to ₹2000 so there is eventual continuity in the system overall

So all in all, in the longer term this scheme should not cause any drastic changes in the markets in India. On the other hand, how effective it is at rooting out black money in the system is also debatable as it addresses only cash on hand at time of the introduction of the scheme and jewellery, real estate or assets abroad bought using black money won't be affected by this scheme.

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