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Let's Start With Less-cash Society To Move To Cashless India, Says PM Modi
India removes its two largest notes from circulation (CCSS Level: Grade 8, Words: 370)
Nov 28, 2016 World News

In a surprise move, India's government has ordered the removal of its two largest notes in circulation - the 500 rupee and the 1000 rupee notes. India's central bank, the Reserve Bank of India (RBI), says that over 5 trillion rupees ($74 billion) in old cash has been removed from circulation since Prime Minister Modi's announcement on November 8. In fact Mr Modi gave only four hours' notice that almost all the cash in one of the world's largest economies will no longer be able to be used.

(Most Indians have spent these days waiting in line. Photo credit: Ravi Babu/Facebook)

People with 500 and 1000 rupee notes were asked to take them to banks to be exchanged or to deposit them into bank accounts. However these two notes make up about 86% of all the money in circulation, and long lines have formed outside banks all day, every day. At the same time many shops are reporting that trade has almost dried up, as people have stopped spending because the shopkeepers can no longer accept the two most popular notes that most people use daily.

Mr Modi is hoping the rupee note switch will cut down on the number of people not paying taxes, by forcing them to use banks. It is also hoped that it will make forgery more difficult as the new notes coming into circulation will be much harder to copy. India does not use online payments, bank cards or other electronic payment systems the way most developed economies do. In fact almost all payments are made in cash, and it is not unusual for people to buy cars or even houses by carrying suitcases full of money. The notes are not particularly valuable by international standards. A 1000 rupee note is only worth about US$15.

The moves will probably be good for the Indian economy in the long term, especially as so few people currently pay any tax at all. Extra tax on incomes will mean the government will be able to spend more on improving the country's infrastructure, such as water, roads and electricity supplies. But until more notes can be printed to replace the old, there will continue to be pain, especially for travelers, small shopkeepers and people with large numbers of the old notes hidden away.

Why has the removal of the two largest notes been especially difficult for India?
The country does not use online payment very much
There are not enough new notes to replace the old ones
The 500 and 1000 rupee notes made up 86% of all money
All of the above reasons apply to the Indian economy
What was the main reason that the notes were removed from circulation?
The money was no longer worth very much
People were using cash to avoid paying tax
They wanted to replace old, worn-out notes
People were spending too much money
Why does the Indian government want to increase the amount it takes in tax?
To remove large amounts of cash from the system
To be able to spend much more on infrastructure
To stop people buying cars and houses for cash
To stop people from taking cash out of the country
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give information, make something public



a public statement or notice



the powdery residue left after the burning of a substance or emitted by a volcano



officially not allow



a very large number, equal to 10^9



movement around and around, or public availability of something



go on and on



something really popular amongst a group of people



right now / a flow of water in the ocean



money stored for future use



cause something to grow or go into production    



hard, not easy



the wealth and resources of countries



using small chips and circuits to control electricity



the ruling body of a nation, state or community


not seen or thought about



money gained through work or investment



the physical things needed to run a society (buildings, power and so on)



existing between two or more countries



a head of a government department



become aware of



while connected to a computer



shaped like an egg



very or especially



take the place of



better or greater than usual



the normal amount



the main body or stalk of a plant or shrub, usually rising above ground



a million million, 10 to the power of 12



strange, not common, different

adj.异常 / 特别


worth a lot of money