As ordinary people in India struggle to pay for basic goods under the new currency regime imposed on Tuesday by the Modi Government, Nobel laureate Kailash Satyarthi has welcomed India's overnight move to withdraw 500 and 1,000 rupee notes from circulation to crack down on corruption and counterfeit currency.

Satyarthi, an Indian children's rights and education advocate and an activist against child labour, said Modi's initiative would help curb human trafficking and child slavery.

Satyarthi, who was awarded the Nobel Peace Prize of 2014 (which he shared with Malala Yousafzai of Pakistan) took to Twitter to say: "Crimes like Human Trafficking and Child labour contributes largely to black money. Congrats PM @narendramodi for this bold step. @PMOIndia."

Nobel laureate Kailash Satyarthi has welcomed India's overnight move to withdraw 500 and 1,000 rupee notes saying it would also to help curb human trafficking and child slavery

Modi's money problem

The shock currency move aims to bring billions of dollars worth of unaccounted wealth which people are hoarding, or "black money", into the mainstream economy to curb corruption.

From midnight on Tuesday, the highest denomination bank notes ceased to be legal tender for transactions other than exchanging them at banks for smaller notes.

Banks are meant to alert the Reserve Bank of India and tax authorities of any unusually large sums being exchanged - which may be the product of ill-gotten gains.

Child rights activist Satyarthi said human trafficking and child labour were amongst the largest sources of black money.

"I commend the boldness of the step taken by Prime Minister Narendra Modi to put an end to black money and corruption," he said in a statement on late on Wednesday.

"Every single rupee earned by the traffickers and slave masters is black money. This move will break their backbone."

India alone is home to 40 percent of the world's estimated 45.8 million slaves, according to a 2016 global slavery index published by the Australia-based Walk Free Foundation.

Thousands of children, mostly from poor rural areas, are taken to cities every year by gangs who sell them into bonded labour or hire them out to unscrupulous employers.

A young boy works at a stone mine within the province Rajasthan

Many end up as domestic workers or labourers in brick kilns, roadside restaurants or small textile and embroidery workshops. Many women and girls are sold into brothels.

Modi came to office in 2014 promising a war against the shadow economy, winning him support from middle-class Indians who accuse politicians and businessmen of cheating the system.

The abolition of 500- and 1,000-rupee notes came with virtually no warning. The old notes will be replaced with new ones in a move which is also designed to stop anti-India militants suspected of using fake notes to fund operations.

Satyarthi, whose charity Bachpan Bachao Andolan (Save the Childhood Movement) is credited with rescuing more than 80,000 enslaved children, said billions of illicit dollars was being made from the buying and selling of children.

An Indian counts currency notes of 1000 and 500 denomination in New Delhi

"I have come across innumerable incidents where the agent or middle man earned at least 5,000 rupees ($75) for the placement of young boys in bonded labour and in cases of girls sold for prostitution and child marriages, this amount was around 200,000 rupees ($3,000)," he said.

"This announcement will go a long way in fighting exploitation of children and corruption in an organised manner. It is a positive step towards creating a more prosperous India for the future generations," added Satyarthi.

The Thomson Reuters Foundation covers humanitarian news, women's rights, trafficking, corruption and climate change.

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