Indians are inventing ingenious ways to try and hide their money from the tax inspector, as the government attempts to flush out vast undeclared wealth by abolishing high denomination bank notes.
The shock announcement by prime minister Narendra Modi on Tuesday gave people only a few hours to spend or deposit 500 and 1,000 rupee bills before they were abolished, although plans are in place to allow a more gradual conversion to new notes.
Those plans involve depositing old bills in bank accounts, however, where they can be seen and analysed, and, as millions of Indians scramble to convert savings using this method, some with piles of so-called ‘black money’ are looking for loopholes.
Retailers and wedding planners say they have been inundated with frantic calls from people looking to bring forward large-item purchases from anyone willing to accept the old notes.
In Mumbai, a senior marketing executive at an event management company that organises large weddings has witnessed the scramble, and said his firm was debating whether to accept payment in the old money.
address that 1,000 and 500 rupee ($15, $7.50) bills would be withdrawn as part of a blitz on ‘black money’ and fake notes.
The government has tried to reassure worried citizens that only tax evaders will suffer under the move.
However, many low—income people – particularly in rural areas – who don’t have access to bank accounts and store cash at home, complain that their savings have been completely wiped out.
On Friday India’s central bank moved to reassure worried bank account holders that sufficient supplies of money were in the system and that it was doing all it could to disperse the notes.
‘There is enough cash available with banks and all arrangements have been made to reach the currency notes all over the country,’ the Reserve Bank of India said in a statement.
However, it warned that it would take time for commercial banks to ‘recalibrate their ATMs’ and urged members of the public to be ‘patient’.
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