Public opinion is divided over the Indian government’s sudden ban on 500 and 1,000 rupee banknotes, which aims to combat corruption and black market trade by taking out of circulation the two most commonly held denominations.
Although they are being forced to spend hours waiting in long queues at banks to swap the banned rupee notes, some New Delhi residents said that they support the government’s currency ban.
"I am an entrepreneur, and I can understand that because of the black money we too face a lot of problems. So I think it is a good step by the Narendra Modi government and it should go a long way in terms of covering black money within the country," said Rajesh Singh, a local business owner.
Still, the sudden enforcement of the ban has had a significant impact on Indians, especially those who have large amounts of the banned notes and need to change their money quickly to get by. Many were unsuccessful even after spending all day in line.
"If you go out now there is a 1.5-kilometer line in front of the petrol pump, and the markets are all empty, business is going down. So for the long run, yes, for the economy, yes, it is a good thing. But for the short term, how it was being imposed could have been done in a better way," said a New Delhi resident.
"For almost a week we are going to be cashless. I am here in the market with my last 100 rupee notes. So even if I have to go back to the office, what about after that?" said another resident.
"For some, it will be good, and for some, it will be a bad decision. It is good in a sense because a lot of fake currency is being circulated in the country. So hopefully with this decision, the fake notes will be taken out from the system,” said a local shop owner.
"But the same time, it is causing a lot of hardship to the poor people, because they have very limited currency. The banks are closed, and they cannot change their old notes into new notes. They cannot do small shopping, small things like hiring a taxi or buying milk. For this, they are having a lot of hardship," he added.
The government hopes the move will push more Indians to embrace credit cards and electronic transactions to help the country move towards a cashless economy that curbs corruption and keeps black money in check.
However, it is a lofty goal for a nation where 80 percent of transactions now happen in cash, said Sameer Rastogi, a New Delhi-based financial advisor.
"I think there were a lot of parallel black economy, which was going on for a long time, would have a hit on it. Definitely, it will, in the long term, give a lot of benefit to the Indian economy. It will positively impact inflation, and we expect a lot of areas like real estate to have rectification in the price index," he said.
Businesses will stop accepting the old currency this week, while Indians have until the end of December to exchange their old notes at banks. The country is expected to spend as much as three billion U.S. dollars to print new notes.
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