Indian Rupee Withdrawal: Uttar Pradesh Election Seen as Referendum

Indian PM Narendra Modi faces his biggest electoral test since gaining power as the country’s most populous state, Uttar Pradesh, goes to the polls for a new state assembly.

Narendra Modi took Uttar Pradesh, which is home to over 200 million people, when he won the 2014 national election.

Uttar Pradesh election is being seen as a referendum on Narendra Modi’s decision to ban high value banknotes in India.

The move led to a cash shortage, hurting individuals and businesses.

The performance of Narendra Modi’s governing Hindu nationalist Bharatiya Janata Party (BJP) in Uttar Pradesh was important because it will be seen as an indicator for India’s national politics.

The move to scrap 500 ($7.60) and 1,000 rupee notes in November 2016 was intended to crack down on corruption and so-called black money or illegal cash holdings.

However, his government has admitted that the withdrawal of high value banknotes, which was met with shock in India, has had an “adverse impact” on the economy.

Narendra Modi has defended the decision, which he said was made in the interests of the poor.

The prime minister has personally led the campaigning for his party with the aim of encouraging a strong showing at the polls, which would strengthen his chances of a second term in 2019.

Uttar Pradesh voted overwhelmingly for Narendra Modi’s BJP in 2014.