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Modi May Need Six More Months to Replace India’s Junk Bills

  • One estimate pegs May 2017 as date when bills will be replaced
  • Deutsche Bank says crunch to cut 50bps from Oct-Dec GDP growth
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India Needs More Time to Replace Stock of Junk Bills

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For Indians expecting respite from the government’s clampdown on cash, here’s a reality check: it probably won’t come soon.

Prime Minister Narendra Modi’s administration may need until May 2017 to replenish the stock of now worthless bills, according to Saumitra Chaudhuri, an economist who advised Modi’s predecessor. The government on Nov. 8 banned 500 ($7.5) and 1,000 rupee notes in a surprise move against graft and tax evasion.