yes, I keep hearing that a lot of black money was converted to white during demonetization. How so ? I can't really figure it out. If a rich guy gives 1 lakh to a poor guy in old notes to deposit in his bank, how does he recover it ? Ok, a lot of people paid their employees 1 year's salary in advance. But I don't think any conversion happened on a mega scale.
But there are quite a few inconsistencies that I find puzzling.
- During demonetization days, the builders in Surat weren't worried at all. They welcomed payments in old money. A broker friend of mine to me this. It was, according to him, a very good time to buy property as well as dispose off any unwanted currency.
- the math of the returned money doesn't add up for me. 99.3% returned to RBI, a lot of it was destroyed by people, about 0.4% was fake currency (as per RBI stats at the time), some is still left over with the individuals (I have one currency note of old 500 rs), some old money was caught more than 2 years afterwards.
It all adds ups to more than 100%. So, what really did the country benefit ? Or, did any corrupt people lose any money ?? I am not sure.
I just accept it as an event that the government said was good for the country, but I don't understand it.