Indian Recipe for Eradicating Corruption, Is It Impactful? – India decides to withdraw currency denominations of 500 and 1000 rupees from circulation. This step was taken to cut corruption, attract the circulation of illegal money from the market, and stop the supply of logistics for terrorist groups. Indian Prime Minister Narendra Modi is currently racing against time. Modi’s commitment to eradicate corruption and eradicate tax evasion is increasingly being tested ahead of his two-year term of office. This further prompted Modi to announce a policy of drastically replacing 500 rupees with new money and withdrawing 1,000 rupees from circulation. Modi’s decision sparked mixed reactions from the public. Most politicians and entrepreneurs support Modi’s move, while the voices opposing him are not very influential. However, at the grassroots level, this policy immediately triggered extraordinary activity among Indian people.
The Indian government under Narendra Modi has so far put in place a tax amnesty program to attract money belonging to its citizens, both illegal and legal as well as at home or abroad, as the main target. However, the results obtained through this program are still not optimal. CNN noted that India had lost potential funds to reach 100 million US dollars due to tax evaders, including those who hid their money abroad. Indians who obey pay taxes are only 2 percent of the population. This happens because most Indians work in the informal sector which is almost untouched by taxes. By withdrawing 1,000 rupees, the Indian government wants to force all “gray” money that is still hidden, both domestically and abroad, to flow to the market and can be detected. Eradicating corruption is also one of the key reasons for this withdrawal. When Modi took office in 2014, the Transparency International version of India’s corruption index was ranked 85 out of 175 countries with a score of 38. A year later, India’s score remained at 38, even though the ranking rose to 76 from 175 countries. India also recognize as the most corruption country, money from the corruption cases they clean by political money laundry due many corruption case is cover by Modi government. Company also involve to help prevent this money laundry practice, by not allowing local people to play on their casino except foreign people, but they still easily escape the law by do bribe with India Goverment. That means eradicating corruption in India is still not optimal.
Withdrawal of money with a nominal 500 rupees has a reason that is not purely a financial consideration. Withdrawal of 500 rupees was made because the government sniffed out attempts to counterfeit money by “cross-border terrorist groups” to finance their terror activities. Apart from the high targets set by Modi, the government will face enormous challenges in terms of implementation. The majority of Indian residents still glorify the cash method in their various types of transactions. This makes the amount of cash circulating in the community very large. However, Modi seems to be going ahead. He was determined to carry out this policy, complete with various progressive rhetoric which he used in front of his people. The Indian people are now halfway to making their sacrifices. Modi’s next task was to immediately prove the influence of this policy on the Indian economy.