RBI mentioned that 99% of the demolished notes came back to them which means that all the black money got converted to white. Everyone is India knows that there is lots of black money as several political parties spend lumpsum unaccounted money during the elections times and few people take the money too. “When there is lot of black money, where did the entire money go?” turned to be an interesting topic.
There are certain loopholes in the system and we need to note some points too,
- Temples can convert black money without much restriction. Most of the black money holders filled the Temple Hundis with black money as they can’t throw it outside and they believe that they get some good deed by giving it to God. Tirupathi Temple is said to have received huge amount during the demonetization time.
- Top level businessmen were said to have given notice of demonetization well in advance to avoid crashing of the Indian market. They invested all the black money on new projects overnight and the money gave good employment for some time. Few people enjoyed good digital services.
- Few people who have black money were said to have tried their best to convert it and donated the remaining money to the poor or made a deal with them to convert the money giving a percentage
In all these cases, black money came back to RBI. Either it might be from Temples, new businesses or donations. But the money got distributed from the black money holders and is invested in the market. Adding to this, India went to digital transactions and people identified the effort of the government to change the nation.