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Back in India, Modi faces currency heat
November 13, 2016, 4:19 pm

Banks have been struggling to replace the withdrawn 500 and 1,000 rupee bills in the past few days [Xinhua]

Banks have been struggling to replace the withdrawn 500 and 1,000 rupee bills in the past few days [Xinhua]


Just hours after returning from a successful state visit to Japan, Indian Prime Minister Narendra Modi took to national TV to urge his countrymen to be patient as the government demonetizes the currency of 500 and 1,000 rupee bills.

There has been a public backlash against Modi’s “essential” move on November 8 to tackle graft in the country and crack down on unknown sources of income.

“To break the grip of corruption and black [unaccounted for] money, we have decided that the 500 and 1,000 rupee currency notes presently in use will no longer be legal tender from midnight ie 8 November, 2016,” Modi said in a speech which was special televised on national TV less than a week ago.

He called on Indians to wait a few more weeks – 50 days – until his plan is complete.

But ordinary Indians and many in the press have decried Modi’s plan as poorly thought out.

There have been long queues at ATMs and banks as millions of people have rushed to exchange the withdrawn bills for other denominations.

There have been reports that ATMs and banks have run out of money.

Other pundits have said that the government should have already printed replacement bills ahead of its snap decision. They say that at least 85 per cent of India’s currency is currently in those very bills the government has withdrawn.

Modi has insisted that the demonetization is an essential move to tackle graft in the country and crack down on black money – also referred to as unknown sources of income.

“These steps taken were not a display of arrogance. I have seen poverty and understand people’s problems,” Modi said on Sunday.

He vowed to root out any corruption.

“If I commit any mistake, I am ready to face any punishment the country will give me. But I promise to deliver a corruption-free India,” the prime minister added.

The BRICS Post with inputs from Agencies

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