When will India become less corruption?

India's fight against corruption: well thought out, badly done

When he declared banknotes invalid, India’s Prime Minister Modi wanted to make terrorist financing more difficult. But first of all it hits the poor.

Suddenly invalid: Indian 1,000 rupee bills Photo: Reuters

DELHItaz | Probably the most drastic measure to combat corruption in India since its independence in 1947 has been a social experiment with uncertain consequences: Last week, Prime Minister Narendra Modi declared all 500 and 1,000 rupee bills (equivalent to around 6.80 euros and 13 , 60 euros) for invalid. A total of 86 percent of all banknotes in circulation must be exchanged or deposited by the end of the year. Now there is a state of emergency.

Modi's intention is to make corruption and terrorist financing more difficult. "Demonetization will shift parts of the shadow economy to the formal sector," believes Firat Unlu, India expert at the Economist Intelligence Unit. In the real estate industry in particular, the proportion of black money that must now be disclosed is particularly high.

But the problem is the pace. In the capital Delhi, most ATMs either do not carry cash or are closed, and long queues are already in front of the bank branches. The government expects the bottlenecks to last well into December. According to the Central Bank of India, there is only one bank branch for every 9,500 Indians. In the north-east of the country in particular, entire areas are cut off from bank offices.

Newspapers report the first deaths as a result of the bank run, and they affect the poorest. A newborn baby in a suburb of Mumbai died because the doctor refused treatment - the family could only have paid in old 500 rupee notes. A woman in Hyderabad hanged herself because she mistakenly believed that her savings were worthless. In Kerala, South India, two men collapsed in line in front of a bank, and help came too late.

The upper class meanders

get by with credit cards

everyday life

The upper class in the urban centers, on the other hand, meanders through everyday life with their credit cards. A lively black market has even developed in the capital Delhi, where old banknotes can be exchanged through middlemen with a 15 percent surcharge.

The government has introduced a new 2,000 rupee note. The only difference between the banknotes and the now invalid notes is their design. There was simply no time for new security features, admitted a government official in an interview with the daily newspaper The Hindua. In the southern Indian city of Karnataka the first flower has already been slipped under a greengrocer - a photocopied banknote cut out with scissors.

The problems come as less of a surprise than the change itself: When the government at the time planned to withdraw old banknotes in 2014, the sharpest criticism came from the then opposition, now ruling BJP party. "That does not affect people with Swiss bank accounts, but those who do not even have an account in India," said party spokeswoman Meenakshi Lekhi at the time.