November 29 2016
Three weeks after Indian Prime Minister Narendra Modi shocked the country by announcing a major currency reform, doubts remain as to whether the aim of corralling tax evasion will work.
“If they want to solve problem of black money, they have go to source of the problem, which is the government,” Steve Hanke, professor of applied economics at the Johns Hopkins University, told CNBC’s “The Rundown” on Monday. “[Black money] is tangled up in Indian red tape, that’s why you have to bribe anyone to get anything done.”
To help eradicate corruption, the government should look to make the Central Bureau of Investigations truly independent and ensure police forces don’t bend to state politics, Kar suggested. Hanke meanwhile believes Modi should have slashed regulations and embraced a free-market regime instead.