Will it put an end to black money? Hardly.Also Read: Rs 500 and Rs 1000 notes banned: Your questions answered by the RBI People with large amounts of black money would convert it into gold and foreign currency, happily incurring the conversion costs this would entail, both when rupees are converted into precious metals or dollars and when these are converted back into rupees. The real way to stamp out black money is to disincentivise fresh generation and clean up political funding.Political parties spend thousands of crore rupees on their campaigns and rallies but declare only a few hundred crore rupees of income. Till then, measures like demonetising currency in an economy like India where more than 80 per cent of all transactions are in cash will serve more to disrupt economic life and to disarm political rivals than to curb black money. (This piece appeared as an editorial opinion in the print edition of The Economic Times)

Source: Economic Times November 08, 2016 19:09 UTC