The Indian economy will suffer after the ban of the note - New York Times
New York, 10 Jan (IANS) The Indian economy is suffering after demonetization and a lack of liquidity has become increasingly difficult for Indians' lives, the New York Times said.
Saying the demolition of 500 and 1000 rupees "was atrociously planned and executed," the newspaper reported in an editorial on Monday that there was little evidence that it had verified corruption.
"Two months after the Indian government decided to suddenly change currency notes most used for new bills, the economy is suffering," the Times said.
"Contracts in the manufacturing sector, sales of real estate and cars have declined, and farm workers, traders and other Indians report that lack of money has made life more difficult," he said.
Prime Minister Narendra Modi announced on November 8 that the high value currency constituted 86 percent of all currency in circulation could no longer be used in most transactions and would be replaced by new notes of 500 and 2,000 rupees.
Modi said it was necessary to fight corruption, black money and terrorist financing.
"But the exchange was atrociously planned and executed. The Indians had to queue for hours off the banks to deposit and withdraw money," the newspaper said.
"The new notes were scarce because the government did not print enough of them in advance. The cash crisis was worse in small towns and rural areas.
"The amount of money in circulation has fallen by almost half, from 17.7 billion rupees (260,000 million dollars) on 4 November to 9.2 billion (135,000 billion) on 23 December, according to the Reserve Bank Of India.
"No economy can lose money in a few weeks without creating great difficulties - certainly not one like India, where money is used for about 98 percent of volume consumer transactions.
"And while an increasing number of people have debit cards and cell phones that can be used to transfer money, most traders are not willing to accept these electronic payments," the Times said.
The editorial says that "there is little evidence that currencies have managed to fight corruption or prevent future bad behavior once the cash is available."
The government had said that people who have contributed more than 250,000 rupees old notes to banks will have to prove that they had paid taxes on the sums owed.
"Due to these rules, officials had expected a lot of black money would never return to banks.