Yes. There are. There will be a cap on the maximum transaction that can be done using cash. So cash accumulation gets reduced. And hoarding large amounts of cash in physical notes will be dissuaded.
Thanks, I've been hearing rumors about this too [1]. Would be a welcome step if and when the govt. implements it.
[1]: http://economictimes.indiatimes.com/news/economy/policy/demo...
Please correct me if I'm wrong, but banning notes is to bring about a few changes like forcing people to declare black money and fighting the counterfeiting industry (just to name a few). Like you pointed out, the cash transaction limit could have been brought into force without banning the notes, but by combining both, isn't the cap more effective in deterring accumulation of black money in the future?
> Introducing higher denomination make even more less sense.
I don't quite understand this. Higher denomination or not, the cap is on the transaction amount, so how are they related?
2. 33 Death count as of Nov 18 [2].
3. New notes are just as easy to counterfiet as old ones and now with 2x yield [3][4].
You can make your own conclusions.
PS: If you are aware of any stats/study governmental or independent, please let me know.
[1] http://economictimes.indiatimes.com/news/politics-and-nation...
[2] http://indianexpress.com/article/india/india-news-india/demo...
[3] http://www.hindustantimes.com/india-news/rs-2-000-notes-foun...
[4] http://timesofindia.indiatimes.com/city/ahmedabad/first-fake...
From what I've read, I would agree with that.
Going cashless will solve terrorism and counterfiet problem. World is going cashless and naturally India would have gone too without the huge cost of banning notes.
However I have different issue with this, allow me to quote
http://economictimes.indiatimes.com/news/politics-and-nation...
Corruption and black money are a consequence of big government, of one set of individuals having discretionary powers over the actions of others. If Modi was serious about tackling black money, he'd bring about institutional changes that would take us towards the minimum government he had promised in his 2014 campaign. Instead, government keeps getting bigger, controlling more and more of our lives. More government = more corruption.
Also Center/Modi wants to make prosecuting corrupt public officials more difficult and bribe-giving a criminal offence. Considering giving bribe is unavoidable fact-of-life and cost of doing business in India, Center wants to make CEOs responsible [1] [2].
And I say this as someone who voted for Modi.
[1] http://economictimes.indiatimes.com/news/politics-and-nation...
[2] http://indianexpress.com/article/india/india-news-india/brin...
Example is Denmark with one of the largest governments in the world but still among the countries with lowest corruption.
For India it is. Its that simple.
What do you suggest Indian Government should do to reduce corruption while still holding same power if not increase it ? Laws & executions have failed consistently. It wont be different this time.
Corruption is a social problem with huge momentum. It took a while for it to creep in and it will take a while to creep out (like all social problems).
Reducing unneccessry regulations and red tapes are only quick fixs we have.
Moreover, if you stub out this 6%, you will arrest leakage of that black money getting converted into land, gold, assets etc.,
See an interesting discussion here, (though this conversation concludes both parties not conceding their point:-):)
https://www.reddit.com/r/india/comments/5cilgj/cash_has_only...
For a good argument in favor of the move, and for a theoretical perspective on this, even in a developed economy with less paper money %, please see Kenneth Rogoff's blog post and also his book - the "Curse of Cash" (I've not read his book though only his posts and tweets on this)
http://blog.press.princeton.edu/2016/11/17/kenneth-rogoff-in...