Immediate Heavy Deflation
As people are scurrying around trying to account for all the money they have earned, especially the ones who earned it in a not-so-legal manner say through smuggling,corruption or counterfeit money find themselves cornered. Because the minute they declare their money they will have the Gov/Income Tax Department breathing down their throats. Its like they have a sword hanging over their heads.
What this also implies is that , this will reduce the total currency circulation in the economy – leading to deflation.a.k.a It will increase the value of money we have because as the total money supply goes down yet commodities and things available in the market have not gone down.
This chokes down pain-in-the-ass activities such as arms smuggling, espionage, corruption, black money and hopefully terrorism due to lack of funding.
We just might be moving towards Paperless Currency as people would rather use cards to transfer money than carry around bucket loads of 100’s around in their wallets.
This also allows the government to keep track of all the exchange transactions which are expected to happen from today till Nov 24th as the catch is that we are expected to provide valid identity proofs such as PAN, Aadhar Card, Voters ID etc. Its no longer #AndhaKanoon. Hurray?
This will also relieve the common man of aliments such as the artificial increase in Real Estate and others of its kind by bringing them within the reach of the Common Man.