When the Royal Swedish Academy of Sciences announced the Nobel economy for Richard Thaler, there was much upheaval in social media in India. Some Twitter users have circulated a tweet on November 8, 2016 the well-known economist supporting the decision of the government of Narendra Modi demonetise Rs 500, Rs 1000 currency mainly, to control the monetary component of BLACKMONEY in the system.
Shortly after Modi announced that high-value currency notes in circulation were banned and would become useless documents within a few hours, Thaler had tweeted to support the movement. “This is a policy I have supported for a long time, a first step towards a cash and a good start to reduce corruption,” he said in a tweet.
But that was only part of the story. After being informed that Modi introduced Rs 2,000 notes as part of this move, his immediate reaction on Twitter was “really? Shit.” In short, Thaler agreed with the idea of withdrawing money from the system, but not in favor of replacing one set of coins with another. That disappointed the economist.
However, what some Twitter users, including the head of the IT cell of the BJP, Amit Malviya, have to tweet the first part of their reaction and conveniently hide the second part, to induce the public. The tweets of these handles were extensively retweet on the microblogging site. According to the media, central ministers have retweet too much Malviya’s tweet.
Remember that Demi’s demonetization was recently heavily attacked by several members, including senior BJP leaders, who alleged that the movement had exacerbated a deceleration of the already known economy, the most affected artisanal sector.
As shown in the second updates of Thaler, the most relevant question is: If indeed, as the government claims, the ban is intended to boost India’s economy for free money, why Rs 2000-t was inserted
It is a widely recognized fact that high value currencies stimulate the parallel or illegal economy. Therefore Dinesh Unnikrishnan of Firtspost argued in an earlier article that if the government wanted to kill illegal transactions, it should be Rs 200 the highest denomination and discard high-value bills as Rs 500 and Rs 2000.
“… The 2,000 rupees increased never really helped the average man for daily transactions because there was not enough money available (even after seven months of demonetization, there is still liquidity in vending machines) article published July 16, 2017
“Most economists would agree that malicious illegal transactions based on money is mainly presented using high valeur denominations. The only way to solve this problem is to reduce the value of outstanding shares and the focus on circulation of lower cut notes for public use, “he said.
Comments from child rights activist Kailash Satyarthi on demonetization are a good example. Satyarthi, who won the Nobel Peace Prize in 2014, had supported this decision shortly after the announcement. He said he would reduce child trafficking.
However, after two months, he discovered that the movement did not have the desired impact. “I expected human trafficking based on black money to be completely paralyzed after demonetization, but there is no significant effort on the ground,” he said in a statement to the Times of India. adding that traffickers now use 2,000 rupees. It is clear that the issuance of Rs 2,000 has failed one of the declared goals of demonetization to phase out the use of liquidity in the system.