India is in the middle of a grand economic experiment as the government has banned 500 and 1,000 rupee notes – equivalent of $7 and $15, respectively – which account for most of the cash in circulation.
Officials say it is a way to root out tax evasion and corruption, but millions of Indians are now scrambling to exchange their old money for newly printed denominations.
Those turning in large amounts of cash need to explain where it came from and prove they have paid tax on it.
And because people can only exchange 4,000 rupees, or $60 a day, millions are waiting in queues for hours every day.
The government did not print many new notes until after the announcement to keep the plan secret so ATMs are still not well-stocked.
It says it will take weeks to get India’s 200,000 cashpoints up to speed.
Prime Minister Narendra Modi has asked people to be patient.
What is the impact of this swift decision?
Presenter: Sohail Rahman
Mohan Guruswamy – chairman of the Centre for Policy Alternatives and a former adviser to the Minister of Finance under Prime Minister Vajpayee
NR Bhanumurthy – economics professor at National Institute of Public Finance and Policy
Swati Dhingra – assistant professor of economics at the London School of Economics and Political Science
Source: Al Jazeera News