"The government has approached its war on black money with five tools; fear, financial inclusion, policy creep, tax reform, and tax organisation reform. Fear created via the law (Black Money Bill, Mauritius Revamp, Benami Bill etc.) is finally changing the advice of chartered accountants. Financial inclusion through Jan-Dhan, Aadhaar, direct benefit transfer, mobile banking, universal payment interface, Bharat bill payment, new bank licences, and much else are blunting the traditional defense of cash as access. This war on black and physical money has hugely positive implications for India’s formal jobs... Decent wages can only be paid by enterprises that have the productivity that comes from the access to talent and credit that comes with formalisation. Over the next decade, I anticipate the number of India’s enterprises to decline by over 50 per cent, ending the self-employment that is self-exploitation and low-productivity informal firms that operate in cash. Black money often goes to goofy investments; it’s the only reason India’s banking system does not have a sub-prime real estate crisis and the new joke about 24 per cent return schemes for cash deployment is that you get 24 per cent of your money back. Now, much of this money will become available to fuel growth in formal jobs, productivity and wages."
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