EditorialSanctum

Govt must swiftly revamp currency exchange process

The past week has been momentous with two important events: the election of Donald Trump as the 45th US President and the Indian government’s decision to demonetise the Rs 500 and Rs 1,000 currency notes. Both had an element of surprise. While many opinion polls had predicted a Hillary Clinton victory, everyone, including the media, was unaware of the demonetisation till Prime Minister Narendra Modi announced it in an 8 pm broadcast on November 8. While it is difficult to predict what a Trump presidency might look like, it is relatively easier to foresee the impact of the demonetisaion.

This was previously resorted to in 1946 and 1978, but it is for the first time that a move of this magnitude has been undertaken where approximately 86 percent of the currency in the two denominations became defunct overnight. These are four broad areas where the impact is expected: the economy; politics and the security situation; the housing market and black money hoarders; and the common people.

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