India is a country with a huge problem with inequality between the rich and the poor. If you look at the list of countries by inequality-adjusted HDI, India appears as number 99 on the list. Much of this is caused by the caste system, but other related factors, such as widespread nepotism and corruption also plays in.
In an attempt to root out the problems of unaccounted wealth and corruption, Prime Minister Narendra Modi has scrapped the 500 and 1000 rupee notes overnight. People in possession of such notes, have to deposit them in banks by the end of December (though I have seen news reports, that indicate that the exchange might continue after this). Of course, the tax department is keeping a keen eye on these deposits, and any unaccounted money will be hit with taxes and a heavy fine.
Not everyone in India thinks this approach is the right one, but it does look like it has some effect:
Driver Rahul Sharma, 25, remembers the exact day when his employer turned from a wolf into a lamb. It was November 9 when his employer called him beta – Hindi for “dear” – for the first time. The maid was asked to give him a cup of tea, for the first time.
“I was shocked at his sudden niceness. It went on for two days,” said Sharma. For the past three years, his New Delhi-based employer has been abusive, bad-tempered, and imperious, often demanding that he turn up for work at 6am after finishing work at midnight.
“He didn’t even bother to remember my name. When he wanted to summon me, he’d call out ‘driver!’,” Sharma said.
“On the third day, the penny dropped. He asked me to deposit 250,000 rupees ($4900) in my bank account on his behalf so that he could get rid of his black money.”
According to the article, a lot of poor people employed by rich Indians, are getting approached by their employers in order to help them whitewash their money. This certainly indicates that there is some kind of effect. I am cynical enough to think that the rich people will find ways around the barriers (if nothing else, then through bribery), but in the process, there might be some benefits for the poor.