Inside India’s Unprecedented Assault on Cash
India is hardly alone in seeking to drive underground money into the banking system. But the scale, pace and finality of Mr. Modi’s action make it a stunning and painful test of what had to this point been a largely theoretical debate.
.. “The great task that the country wants to accomplish today is the realization of our dream of a cashless society,” the prime minister said in a recent radio address.
.. The lives of the poor, in particular—many of whom depend on irregular, off-the-books employment paid in cash—have been upended.
.. That was when Mr. Dastur noticed a problem: The new bills were slightly smaller than the old ones.
.. engineers would have to open up each of the nation’s ATMs and manually reconfigure the cash drawers before they could dispense the new notes—a process that NCR estimated could take two months.
.. The Modi administration insists there will eventually be big benefits, including better tax collection, improved surveillance of crime networks, and more accurate monitoring of commercial activity itself.
.. Defenders of cash see risks in those same capabilities—including a loss of privacy and a vast expansion of government power.
.. Former U.S. Treasury Secretary Lawrence Summers, writing in The Washington Post, argued, “It’s time to kill the $100 bill.”
.. Fewer than a third of Indians have a smartphone
.. Harvard economist Kenneth Rogoff, author of “The Curse of Cash.” “That’s a big ally of governments.”