Few days before Mr. Ramdev Baba demanded Government to ban currency notes with value of Rs.500 and Rs.1000. But why !?!? What is going to happen by banning these currencies ?! Is this statement baseless ?! Lets discuss about this in detail.
There are various logic behind Baba ji's statement. Lets examine one by one with examples.
Logic 1
Lets start with per capita income of Indians. It has reached Rs. 50,000 for the first time. We have seen 16.9% increase in our per capita income than previous year (2011).
There is an English phrase saying "Hand full of salary". Now what will be the number of currencies a person will receive in a duration of one year.
Rs. 1000 Currency * 50 = Rs. 50000
Simple. Annual salary of an average Indian can be paid in just 50 currency notes.
Do you know the maximum currency value in America. Its just 100$. Per capita income of Americans is 47200$. This gives you a clear relation.
Hence Rs. 100 currency is the most appropriate maximum value of currency for Indian scenario.
Logic 2
Corruption in India has gone well past crores. Now we are dealing with thousands of crores or lakhs of crores. Assume you need to apply for an Engineering seat in a reputed engineering college. They ask you for a donation of Rs. 10 Lakhs. How will you be paying them this hot cash ?!!?
Probably through Rs. 1000 or Rs. 500 currencies !!! In recent days people seldom pay bribe with Rs. 50 or Rs. 100 currencies. That time has gone past long ago.
Hence, reduce higher currency value, reduce corruption.
Logic 3
Fake currencies have become most common nowadays. But they target only Rs. 500 and Rs. 1000 currencies. The reason is very simple. They invest in huge amount for the replication of actual currency. Hence they could get profit margin only if they print Rs.500 or Rs. 1000 currency.
Report says that around Rs. 200000 crores of fake notes prevail in Indian market and all of them are just Rs. 500 and Rs. 1000 currencies.
Logic 4
Black money market increases only when transactions or purchases are done without bank transfer / pan card numbers. Generally middle class people contribute to the black market knowingly or unknowingly.
Assume I have a wallet with me. And the maximum currency value in India is Rs. 1000. I could easily fit 10 currencies in my wallet and hence now the amount in my purse is Rs. 10000. I prefer buying any item without bill or without informing my bank. Hence I support black marketers.
In case the maximum currency value is Rs. 100. I might require a hand bag to carry Rs. 10000. Hence I would have made this purchase just by swiping my debit card. Now this transaction is accounted. Hence black market is suppressed.
Trivia
Till 1969, America is known for its highest corruption rate. Mr. Richard Nixon made a brave move that time by banning any currency more than a value of 100$. Till 1969, America was having 1000$, 10000$ and even 100000$ currency in their market. This revolutionary decision rewrote the fate of America and today they are so called superiors in the World.
Now its up to us to think and act.
Hope this post was useful. Please refer this blog to your friends and relatives. Do vote in INDLI and INDIBLOGGER, if we deserve. You could write back to us in the comment session below or through our FB page. Do visit our page for the next post.
There are various logic behind Baba ji's statement. Lets examine one by one with examples.
Logic 1
Lets start with per capita income of Indians. It has reached Rs. 50,000 for the first time. We have seen 16.9% increase in our per capita income than previous year (2011).
There is an English phrase saying "Hand full of salary". Now what will be the number of currencies a person will receive in a duration of one year.
Rs. 1000 Currency * 50 = Rs. 50000
Simple. Annual salary of an average Indian can be paid in just 50 currency notes.
Do you know the maximum currency value in America. Its just 100$. Per capita income of Americans is 47200$. This gives you a clear relation.
Hence Rs. 100 currency is the most appropriate maximum value of currency for Indian scenario.
Logic 2
Corruption in India has gone well past crores. Now we are dealing with thousands of crores or lakhs of crores. Assume you need to apply for an Engineering seat in a reputed engineering college. They ask you for a donation of Rs. 10 Lakhs. How will you be paying them this hot cash ?!!?
Probably through Rs. 1000 or Rs. 500 currencies !!! In recent days people seldom pay bribe with Rs. 50 or Rs. 100 currencies. That time has gone past long ago.
Hence, reduce higher currency value, reduce corruption.
Logic 3
Fake currencies have become most common nowadays. But they target only Rs. 500 and Rs. 1000 currencies. The reason is very simple. They invest in huge amount for the replication of actual currency. Hence they could get profit margin only if they print Rs.500 or Rs. 1000 currency.
Report says that around Rs. 200000 crores of fake notes prevail in Indian market and all of them are just Rs. 500 and Rs. 1000 currencies.
Logic 4
Black money market increases only when transactions or purchases are done without bank transfer / pan card numbers. Generally middle class people contribute to the black market knowingly or unknowingly.
Assume I have a wallet with me. And the maximum currency value in India is Rs. 1000. I could easily fit 10 currencies in my wallet and hence now the amount in my purse is Rs. 10000. I prefer buying any item without bill or without informing my bank. Hence I support black marketers.
In case the maximum currency value is Rs. 100. I might require a hand bag to carry Rs. 10000. Hence I would have made this purchase just by swiping my debit card. Now this transaction is accounted. Hence black market is suppressed.
Trivia
Till 1969, America is known for its highest corruption rate. Mr. Richard Nixon made a brave move that time by banning any currency more than a value of 100$. Till 1969, America was having 1000$, 10000$ and even 100000$ currency in their market. This revolutionary decision rewrote the fate of America and today they are so called superiors in the World.
Now its up to us to think and act.
Hope this post was useful. Please refer this blog to your friends and relatives. Do vote in INDLI and INDIBLOGGER, if we deserve. You could write back to us in the comment session below or through our FB page. Do visit our page for the next post.
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