In one of the historical reforms of the economy of India, Rs. 500 and Rs. 1,000 notes were banned. This was one of the boldest moves by the Government of India, announced over a 40-minute speech. Most of the industry and commoners alike reacted to this decision to curb corruption with over

Question

In one of the historical reforms of the economy of India, Rs. 500 and Rs. 1,000 notes were banned. This was one of the boldest moves by the Government of India, announced over a 40-minute speech. Most of the industry and commoners alike reacted to this decision to curb corruption with overwhelming support. Whereas some sections were of the opinion that it was a draconian scheme causing hardships to people. A recent study had pegged India's black-market economy at over ₹30 lakh crore, or about 20 percent of total GDP. This is even bigger than the GDP of countries like Thailand and Argentina. Rather than getting support from most of the industry, what would have been the reason that some of them declared it a draconian scheme? (I) It was declared without giving time to people to withdraw ample cash for their use. (II) It had caused certain hardships in daily activities. (III) It stopped the earning of black money for the majority of the people.

Accepted Answer

Only I and II. The criticism was mainly about the sudden announcement and the hardships caused in daily life, especially cash shortages and disruption. Stopping black money is the objective of the move, so it would not be a reason for opponents to call it draconian.

Solution

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