In December India's Prime Minister implemented a new program to both eliminate high currency denominations, and to go after consumers who use cash outside their banking system. This of course led to financial turmoil in a nation that conducts 98% of of its transactions in cash, and where less than 36% of the population has a bank account.
In response to the banning of certain denominations of currency, many Indians rushed into exchanging their cash for physical assets such as gold, jewelry, and even silver, and according to India's Finance Minister on Dec. 30, this is the next thing the government will go after now that physical Rupees have been limited in their economy.
As the government takes stock of the black money post demonetisation, its mulling the next step now. The focus is set to be on tracking down 'black wealth' or the illegal money pumped in real estate, gold and silver.
Minister of State for Finance Santosh Gangwar while speaking to India Today disclosed that noose will tighten around tax evasion routes in physical assets.
"We are doing crackdown on banks as we are getting information. Black money has a face, people can pump it in real estate, buy gold or silver. We will be stopping it," Gangwar said.
Already, the government has amended the benami property act to detect the money laundering the real estate. Benami Transaction (Prohitibion) Amendment Act 2016 that came into effect on November 1. It aims at checking illegal money parked by tax evaders in property that is registered under multiple owners.
"When PM was campaigning for Lok Sabha he had black money on the agenda, that's what he has delivered now and we will take it further," the minister added.
Currently PAN card is required for selling gold, silver and jewellery over Rs 2 lakh. Since demonetisation, I-T sleuths have been keeping a hawk eye vigil at jewellers and bullion traders to track fake 'gold sale' for routing denotified currency. - India Today
India won't be the only country in the coming days to usher in severe capital controls that restrict the ownership of cash and gold, or allow individuals to transact outside the nation's financial system, as just last week the EU began construction of new restrictions regarding the purchase of assets like gold from outside the Eurozone.
As the world rushes headlong into new currency, debt, and insolvency crises, governments will continue to crack down on the people's ability to choose whether they want to function in their collapsing systems. And with so many options available now such as Bitcoin, Paypal, Goldmoney, Karatbars, etc... to both store your wealth and transact outside of banks, the coming year may see an even greater acceleration of capital controls by government's as they strive to protect their own dying platforms at the expense of the people and their money.