Gollum Posted March 1, 2015 Posted March 1, 2015 http://timesofindia.indiatimes.com/city/delhi/Two-held-with-fake-notes-from-Pakistan/articleshow/46401452.cms I am a complete dummy as far as economics is concerned. Can someone explain to me what are the threats India is facing because of fake currency from Pakistan and Bangladesh? How can India counter this? How grave is the situation now?
zen Posted March 1, 2015 Posted March 1, 2015 It depends upon the amount of fake currency in circulation. In simple terms: a) Fake currency increase the money in circulation, which could drive inflation ----> so prices of good and services goes up b) If businesses are not careful, they could lose money as they would have sold goods and service in exchange for fake currency c) Could lead to concerns about accepting paper money in the economy However, the money coming from Pak and BD could probably be to help finance anti-India activities. For e.g. unsuspecting youths can be paid in fake currency for their service in carrying out say Jihadi or anti-national activities (in essence making them do illegal and unethical activities for free or at the cost of printing fake currency) :dontknow:
Gollum Posted March 1, 2015 Author Posted March 1, 2015 Thanks rett for your answer. Here the anti India activities option looks most likely especially coming from our parosis. Lots and lots have to be pumped in to have a quantifiable adverse effect on our economy.
Precambrian Posted March 2, 2015 Posted March 2, 2015 Thanks rett for your answer. Here the anti India activities option looks most likely especially coming from our parosis. Lots and lots have to be pumped in to have a quantifiable adverse effect on our economy. Drive real estate mafia - by offering unbelievable sums of money to purchase land. Since land transactions are always settled in cash, fake currency helps here. The sellers are small and unsuspecting, and to evade tax they show lower value on paper. But what they actually get are largely worthless piece of paper, and can't go to court either otherwise will be caught for tax evasion. Have seen umpteen such cases in Kerala, esp northern Kerala where people of one particular community has bought land in troves especially in the last few years. Ever since NDA assumed power, this boom has come down drastically and we are actually witnessing prices of land fall!
Recommended Posts