Where should I invest 1000 rupees
Backpackers have a hard time anyway: Everything they need for a trip of several weeks or even months has to go into one backpack. But that has now become a little more difficult for travelers to India: Overnight, the government withdrew the country's two largest banknotes, the 500 and 1000 rupee notes. And this in a country where almost everything is paid for in cash, which is why locals and tourists alike already deal with many, many bills.
The country is practically unprepared for the reform - and that was probably the aim. "In order to free ourselves from the grip of corruption and black money, we have decided that the current 500 and 1000 rupee notes are no longer valid," said Prime Minister Narendra Modi in a speech on Tuesday evening - at midnight.
Observers suspect that up to a quarter of India's annual economic output could bypass the tax authorities. Official estimates assume that less than three percent of all Indians pay income tax at all. That wants to end Modi.
The largest bank note was temporarily the 100 rupee note, which is worth around 1.36 euros at the current rate. That’s not much in India either. From Thursday, the old notes will be replaced by new ones worth 500 and 2000 rupees, which are supposed to be more forgery-proof. But these new banknotes should also remain scarce: Only 4,000 rupees, the equivalent of a good 54 euros, can be exchanged directly, the rest must be paid into an Indian account.
The Federal Foreign Office warns of a shortage of cash
According to the World Bank, however, so far only half of all Indians have an account. Withdrawals from ATMs will be limited to 2,000 rupees per day until November 18th, after which the limit will increase to 4,000 rupees. In addition, across all channels, a maximum of 20,000 rupees can be withdrawn in cash per week.
"India remains a cash-based economy," the Indian central bank RBI begins its explanation of the action. Electronic payment, by credit card or even cell phone, is impossible in many places on the subcontinent. From rickshaw drivers to hotel porters to real estate agents, most of them only accept cash. "For the next few days, there will be considerable bottlenecks in the supply of cash throughout India," said the Foreign Office.
For backpackers, this means one thing above all: They have to carry around even larger bundles of money with them on their trip.
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