My suggestion to removing corruption and black money in one go

We all have been talking about use of lokpal to remove/control corruption.
There is also a parallel campaign run by Baba Ramdev for black money stashed abroad.

However we alos know that there a lot of black money inside india. Estimates are that we have 1 trillion USD of black money in India, and all of it runs as a paralle economy. Now 1 trillion USD is about Rs 50 trillion, which is 50 Lac Crores. This amount more than half of GDP. Our countrys fiscal defict is about 15% of GDP. So even if 50% of this this internal black money is retrieved, we will not only get rid of all our fiscal defict, but also have a huge leverage to doing massive infrastructure projects. These are just teh direct benefits. There are numerous indirect benefits too.

So here is my proposal


Remove all paper currency and replace it by plastic money.
What is plastic money. It is a card much like debt card, and an associated account number. There are about 72 Crore voters. Distribute these cards to them. And make machines which allow transfer of money electronically from one card to second card. Now all the money transaction that happens will be recorded. Nobody can bribe now, because all money txn can easily be traced. I calculated the cost even if such machines are supplied in abundance in every nook amd corner. Taking card cost and also the compter backend reqd to run this, i do not think it will be more than 20000 Crores which is less than food security bill money for one year.

Remove all big denominations like 500 and 1000 and 100. You may keep small denominations initially. The machines will simply ask you to punch in two cards and the amount, would ask for pin and transfer money from right to left. It will be that easy to operate.We can also use mobile for such transfers. Mobile are used extensively today by all people.There would be ways to block a account in case of lost card from another card.

Once this is ready to be implemented, you can ask all people that they either deposit their current cash in bank accoutns with 60% tax or else they would loose money in say one year time, after this systems comes to implementation.

The best people can do is to borrow lots of gold(or such things) in that one year and gold/silver may rise. But then we can lay down rules to control sale purchase of gold.

If people invest money in infrastructure, first of all it will be good, seocndly 1 year be too less a time to spend the entire amount on infrastructure.

It has got far reaching effects too, no mor enew balck money can be generated. This will allow much better tax collections in times to come. All people will automatically become tax complaint since every money they receive will show up as their income. NO need to file income tax returns, since all the data is already in place.