One of the most historical reforms in the history of Indian economy is the banning of Rs 500 and Rs 1,000 notes which was confirmed by the Prime Minister of India, Mr. Narendra Modi. He had announced for banning immediately Rs 500 and Rs 1,000 notes for stopping the circulation of black money. The banning of Rs 500 and Rs 1,000 is going to bring an adverse impact on different sectors. The main theme of this historical decision is to remove the black money from the society. With this initiative, the black money holders have only two options with them. Either they have to declare their income through banks or they have to burn their stored files as well as black money. If the black money holders show their income in the normal business then they are required to pay the taxes based on current rate.
The Prime Minister of India Mr. Narendra Modi said that the terrorists were using the fake notes of Rs 500at the present exchange rates for carrying out their operations. Thus, he believes that withdrawing the whole series of fake notes and introducing of the new notes is going to provide a surgical strike on the terrorist groups. The scheme presented by Mr. Narendra Modi had a harsh impact on the rural economy. The rural economy depends on the currency transactions and people staying in rural India have plenty of Rs 500 and Rs 1000 notes. Thus the people in rural India are going to face a huge amount of challenge while exchanging their notes. The black money holders whose money is in the form of gold and foreign currency will not be affected due to this scheme proposed by Mr. Narendra Modi. The banning of black money is also not going to hamper the black money that is deposited in Swiss Banks, property, gold, and offshore accounts. It has been identified that the political parties used the black money on a large scale.
The banning of Rs 500 and Rs 1,000 by Mr. Narendra Modi have some favorable impacts of different fields. The banking sector is increasing their deposits on a large scale especially from the businesses and people who have legally earned their money. It has been identified that there is a great impact on the real estate business and jewelry. The jewelry industry of India had welcomed the new decision made by the Government. Due to this surgical strike, the demand for gold will rise on a large scale as the common people will obtain faith on the gold as compared to the currency notes. The secondary property market and the unorganized builders are going to have an adverse effect that is provided by the decision of the Government. The decision made by Mr. Narendra Modi will replace the cash transactions slowly into card transactions which are going to enhance the cashless economy.
The new scheme sanctioned by the Indian Government developed a huge amount of problems for the local grocers, vegetable vendors, and fruit sellers. According to the recent scheme, the government hospitals are ready to accept Rs 500 notes while most of the health care is provided through private hospitals. The tourists coming in India are also facing problems during their transitions. Thus, it can be concluded that the introduction of this new scheme by Mr. Narendra Modi mostly had positive impacts on the business environment and economic infrastructure of India.