It has been quite an exciting day yesterday, as the world witnessed two major events in two different parts of the globe. While the world is still stunned over the victory of Donald Trump, there’s another piece of news that is worth sharing.
On the same day that America elected Donald Trump as their President, India’s Prime Minister Narendra Modi scrapped Rs500 and Rs1,000 notes in an attempt to curb money laundering.
This news came as a big shock to many as Modi announced that, “The notes will not be legal tender from midnight 8th November 2016 and they’ll just be worthless pieces of paper”.
According to most financial experts, this move was unexpected and one obvious reason for it is to ensure that unaccounted wealth is not siphoned off via other channels like gold or property.
Currently, the citizens of India will be allowed to exchange these notes to other denominations from 10th November 2016 till 31st December 2016 in banks and post-offices. However, these places will have tight security and CCTVs to monitor the exchange of notes to prevent exchanging illegal cash.
Following this, pictures of Rs500 and Rs1,000 notes that are being dumped across India started circulating in social media.
Following this, India’s real estate sector is expected to receive a major hit.
“Prices coming down to more reasonable levels in the residential property market cannot be ruled out. The sector will be under serious pressure with the volume and number of transactions in residential and land markets seeing a substantial downward trend. But its long-term effects will be positive,” said Knight Frank India chairman and managing director Shishir Baijal.
“Modi’s initiative would help to curb unaccounted cash in the real estate sector and lead towards greater transparency, which would give the Indian real estate sector more credibility and make it more attractive for foreign investors,” said JLL India chairman and country head Anuj Puri.
Many world leaders, including US President Barack Obama applauded Modi over such a move to prevent corruption. So far, this is the biggest and boldest step taken by the government to curb this issue.
With this, a new series of Rs500 and Rs2,000 will be introduced with new size specifications and security features.
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my
