India's currency move: short-term pain to achieve long-term gain

AS bold economic decisions go, there are few parallels to the Indian government's move to scrap 1,000 and 500-rupee notes. The enormity of the decision is seen in the fact that Prime Minister Narendra Modi personally announced it as an address to the nation, which is not a norm in the country.

The government has said that the move was aimed at locking out money that is unaccounted for - commonly known as "black money" - which is being withheld from the tax authorities, or may have been acquired corruptly. In addition, the move will curb financing of terrorism through the proceeds of fake Indian currency notes.

India has been grappling with the issue of unaccounted wealth for decades. Various estimates put the size of India's shadow economy at more than 20 per cent of its GDP. At current levels, that equals to US$415 billion in unaccounted wealth.