Black Money And Inflation

Muslim Murasu, January 2012

Reserve Bank of India manages currency note printing. On an average, a currency note changes 50 hands before becoming unusable. Currency worth of ten lakh crore rupees is in circulation in India. National growth is 60 lakh crore rupees. People do not carry currency all the time in their hands and pockets. Two lakh crore rupees of currency notes is adequate.
There is no way 50 times 10 lakh crore rupees will be used. Black money use internally in India is around 150 lakh crore rupees. Money stashed abroad is 400 lakh crore rupees. Rampant hoarding of money started since 1990. Indian names have been recovered from Swiss banks. Politicians, higher officials and large entrepreneurs have been in this habit.
Baba Ramdev suggests that denominations of 500 rupees and 1000 rupees should be pronounced void. This will bring out white money and black money will go down the trash.
Money locked in vaults is not going to benefit anyone. Strong steps are needed to control this. Money movement of those having accounts with foreign banks should be brought under radar. There are no relatives abroad nor is there any foreign business; but the folks continuing to do foreign transactions are puzzling.
Banking contacts with countries that function as tax havens should be completely severed. Black money sharks should be awarded death sentence. Indian money stashed abroad should be declared as national property. Investments from Mauritius should be probed.
Price hikes are reflection of hoarding. There is constant manufacturing going on and 120 crore Indians are continuously toiling. But prices are spiraling up without any stop. Those who do not pay taxes properly should be eliminated from public life. Otherwise, inflation won’t reduce.
Hostile news is always on air about neighboring countries of Pakistan, Bangladesh, Afghanistan and China. But there is no hatred towards nations hosting black money banks that cripple Indian economy. Hypocrisy of our patriots becomes evident. Indian mentality to pose faith in foreign banks should be analyzed. Indian loyalty and foreign loyalty should be defined and discussed. Fear and hatred psychosis towards Indian banks and love and faith for foreign banks should be brought to light. There is no other way to rein in inflation.