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Demonetization Effect: India does have some Wealthy Wives in the Country

The money is saved from bargaining at markets, buying second hand school books and stretching the dough

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Indian currency. Pixabay
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November 22, 2016: Mothers often stow money. They save the money from the expenditures and hide it away so that the money could be used in emergencies. This is not just an Indian stratagem; women around the world do the same. In Japan, there is even a word for it: “hesokuri” or money hidden in the navel.

Times of India reported a case of Dadar, where a housewife Kavita Kishore saved about Rs. 2,50,000 from the allowances and all the birthday envelopes. Her husband runs a cut piece cloth shop in Dadar. Since last year, for every month, her husband has been giving her Rs. 20,000 for the household expenditures. When they got married 30 years ago, he used to give her Rs. 500 in tens and twenties and told her to keep the change.

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The money is saved all these years from bargaining at markets, buying second hand school books and stretching the dough. Last week, she had to dig out all the money stashed in the house and at her sister’s place. Her husband was surprised to see all the money she had saved in all these years.

Although he has promised her that he will withdraw the money whenever she needs it, she believes she will have to start again from scratch.

Women in India despair demonetization because their cash reserves were the funds they kept out of sight of their husbands. Now, they have to forfeit all the money.

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The Japan Times cited a survey last November conducted by a life insurance company. The results were astonishing. The average savings of a woman in Japan was Rs. 7.8 lakh in Indian currency.

South African financial journalist, Sasha Planting, believes there is nothing wrong with a secret stash. She thinks stash is prudent. Keeping it a secret is totally up to the people.

Pamela Gomes, a 40 year old private tutor in Bengaluru, saved about Rs. 32,000 after her husband didn’t approve her buying expensive jackets. She thought that she is an independent woman and she don’t need any lectures when she is contributing her share to the house.

Prepared by Diksha Arya of NewsGram. Twitter: @diksha_arya53

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The Answer to The Impending Questions On Demonetization Are Here

While it did broaden the country’s tax base, it was a nightmare for the immense, cash-dependent informal economy.

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Indian Currency. Pixabay

Nearly all of the currency removed from circulation in a surprise 2016 attempt to root out illegal hoards of cash came back into the financial system, Resever Bank of India  has announced, indicating the move did little to slow the underground economy.

Prime Minister of India, Narendra Modi’s currency decree, which was designed to destroy the value of billions of dollars in untaxed cash stockpiles, caused an economic slowdown and months of financial chaos for tens of millions of people or demonetization.

Modi announced in a November 2016 TV address that all 500-rupee and 1,000-rupee notes, then worth about $7.50 and $15, would be withdrawn immediately from circulation. The banned notes could be deposited into bank accounts but the government also said it would investigate deposits over 250,000 rupees, or about $3,700. The government eventually released new currency notes worth 500 and 2,000 rupees.

 

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An activist of Congress party hold the banned 500 and 1000 rupee notes.

 

In theory, the decree meant corrupt politicians and businesspeople would suddenly find themselves sitting on billions of dollars in worthless currency, known here as “black money.”

“A few people are spreading corruption for their own benefit,” Modi said in the surprise nighttime speech announcement of the order. “There is a time when you realize that you have to bring some change in society, and this is our time.”

But even as the decree caused turmoil for those in India who have always depended on cash — the poor and middle class, and millions of small traders — the rich found ways around the currency switch. In the months after the decree, businesspeople said that even large amounts of banned currency notes could be traded on the black market, though middlemen charged heavy fees.

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Prime Minister Narendra Modi along with mayor, flickr

The reserve bank of India report said in its Wednesday report that 99.3 percent of the $217 billion in notes withdrawn from circulation had come back into the economy. Some officials had originally predicted that number could be as low as 60 percent.

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“Frankly, I think demonetization was a mistake,” said Gurcharan Das, a writer and the former head of Proctor & Gamble in India. He said that while it did broaden the country’s tax base, it was a nightmare for the immense, cash-dependent informal economy.

“You can’t overnight change that in a country which is poor and illiterate. Therefore, for me it’s not only an economic failure but a moral failure as well,” Das said. (VOA)