The great Indian demonetisation!

In a surprising move, Prime Minister Narendra Modi yesterday announced the demonetisation of 500 and 1000 rupee notes to curtail money laundering. Interestingly, the PM also unveiled the new 500 and 2000 rupee notes with the state-of-art magnetic technology which will make it difficult for blacklisters to hide money.

In his epic speech, Modi said, “On the one hand is the problem of terrorism; on the other is the challenge posed by corruption and black money. We began our battle against corruption by setting up an SIT headed by a retired Supreme Court judge, immediately upon taking office. Since then a law was passed in 2015 for disclosure of foreign black money.”

“The magnitude of cash in circulation is directly linked to the level of corruption. Inflation becomes worse through the deployment of cash earned in corrupt ways. High circulation of cash also strengthens the hawala trade which is directly connected to black money and illegal trade in weapons. Debate on the role of black money in elections has been going on for years.”

“To break the grip of corruption and black money, we have decided that the 500 rupee and 1,000 rupee currency notes presently in use will no longer be legal tender from midnight tonight, that is 8th November 2016. This means that these notes will not be acceptable for transactions from midnight onwards. The 500 and 1,000 rupee notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper. The rights and the interests of honest, hard-working people will be fully protected. Let me assure you that notes of 100, 50, 20, 10, five, two and one rupee and all coins will remain legal tender and will not be affected.”

So who are the real winners here? It is definitely the digital wallets service providers like Paytm, Mobikwik, My Airtel, Oxigen, PayUMoney, Freecharge, Mobikwik, Momoe etc. Though black money and terrorism funding seem to be the main agenda of the government, cashless future is also promoted indirectly here. For a developing nation like India, digitalisation seems to be happening at a snail pace when compared to the west. From Paypal to Bitcoins, cashless transactions are a reality now.

Here are few reactions on Twitter after the announcement:

PayTM: We have got two words for you: Paytm Karo.

Mobiwik: Our PM has played the TRUMP card, poori India HILLARY hai!#GoCashless #GoMobiKwik #Currency

Oxigen: Breaking News: ATMs & Banks are shut down for 2 days! Not So Breaking News: Oxigen Wallet #KaamAayega!

Freecharge: Great Move! Trash the Cash-Just Freecharge #Freechargenotcash