Prime Minister Narendra Modi's decision to scrap Rs1,000 and Rs500 banknotes will not only squeeze the country's black money economy, but will hit the Pakistan-sponsored terror financing mechanism even worse, say strategic affairs analysts.
According to media reports, fake Indian currency notes are printed at government presses in Lahore, Quetta, and Peshawar. And as deputy chief minister of Jammu and Kashmir, Nirmal Singh, commented, Pakistan prints more Indian currency than the Pakistani currency (See: New notes to put spanner in Pak's counterfeiting machine).
The ISI then smuggles the fake currencies into India via Sri Lanka, Nepal and Bangladesh and from as far away as Thailand through smugglers, who sell these in 2:1 ratio against genuine Indian currency.
It was also reported that Pakistan had pumped over Rs100 crore of the fake currency into Kashmir to fuel the current unrest.
"This decision is a death blow to terror funding network. This step was necessary for national security," BJP leader Subramanian Swamy said.
The problem was accentuated when Pakistan began printing Indian currency with perfection. And all this money was pumped into India to fund terrorist activities.