Indian Prime Minister Narendra Modi Bans 500 and 1,000 Rupee Notes - Takes 85% of Currency Out of Circulation

[DonRocks]

This is *easily* a significant enough story where it needs to be discussed here. I don't know as much about it as I should, but I hope to learn from the discussion here.

Dec 7, 2016 - "India's Central Bank Says That Cash Crisis Is Hurting the Economy" by Rishi Iyengar on money.cnn.com

I have no doubt that there is massive tax fraud in India's largely cash-based economy, and that this move may even help in the long-term, but one might think there could've been more notice. Does anyone know why this came into being so suddenly?

Nov 25, 2016 - "Can India Really Become a Cashless Society?" by Sameer Hashmi on bbc.com

[JeffC]

My understanding is that Modi wanted demonetization to be a complete surprise.  The rationale being that had the Indian government printed enough new rupee notes to replace the old ones, the word would have leaked out, thus defeating the purpose of flushing out/demonetizing "black" money.  I've also wondered the same thing...why destroy so many small vendors, farmers, etc?  

But what do I know?  Much of my attitude is a selfish one, knowing that my upcoming stay in India is going to be inconvenienced, to say the least.  I would love to hear from some of the Indians on the board and how they see it.