Demonetization of Rs 500 and Rs 1000 notes is implemented at the stroke of an hour of the midnight of Nov 9, 2016. It’s been more than 50 days to this decision and the outcomes of this decision have started coming in front of the common people. Ruling party unanimously supports this decision while the opposition is not leaving a second to oppose this change. Rs 500 and Rs 1000 are ceased to be the legitimate medium of exchange and India lost 86 percent of its monetary base overnight.
Every coin, when tossed, has a fair possibility of result for both its faces and for our government this step is nothing less than tossing a coin in the air. This step has created an impact in the Indian economy and has affected the life of people directly or indirectly. After 50 days of demonetization, this blog of mine would highlight its impact (Data enclosed below is summed up from reputed newspapers and magazines).
Any Change that occurs on such a big scale brings uncertainties, insecurities and thus resistance. Issue of black money is not something new in India. Demonetization is just a simple step towards its abolishment but at the end it is responsibility of the citizen to refrain itself from any such practices.
Written by Deepak Sharma
An ambivert by nature and a keen business editorial reader. I believe - "Either write something worth reading or do something worth writing"
#1. Seizing Black Money -
Seizing black money is the primary objective of Indian government under this decision. As per the numbers given by govt. India had a currency worth 15 lakh crore in circulation in 500 and 1000 rupee notes. Out of this approx 10-11 lakh crore has come back to banks, nearly 4 lakh crore is still to come to banks.#2. Abolishing Fake Currency -
As per the records the total fake currency estimated was around 400 crore and this holds 0.025% of currency in circulation, although there is no appropriate data available for this, but as per a news only 10,000 fake notes have been found till now, which is quite less (this does include fake Rs 2000 notes).#3. Effect on Real Estate -
Real estate sector creates the highest number of Jobs after IT in India. A huge amount of money goes unaccounted in real estate sector deals and thus making this sector as the best platform to park black money. With the help of Demonetization, all such transactions will be checked and a transparency will be held in this sector certainly.#4. Immediate Unemployment in Unorganized Sector -
One of the negative effects could be the immediate unemployment in unorganized sector (laborers and raw materials) due to sudden slow down movement of cash in the country. Although the government is of the opinion that this issue will be resolved soon with the passing days as RBI is printing new notes with its full capacity.#5. Divesting Political Parties Rallies -
Five states have their elections in 2017 and the major part of election management for political parties comes from cash donations. So undoubtedly, reduction in the rallies in major states like Uttar Pradesh and Punjab are a result of demonetization.#6. Increased Cashless Transactions (Digital Payments) -
Certainly, the cashless transaction is the need of the hour. Digital payments will sustain black market or undergrounded money that often proves damaging to national economies. Our country has gained a tremendous increase in customers adopting cashless transactions.#7. Chaos and Confusion Amid People -
Pulling out 86% of the cash overnight has obviously created some confusion and chaos in the minds of people. Moreover, abiding queues outside the banks have created a lot of chaos in various states. As per the records, around 75 people were found dead due to demonetization.#8. Impact on GDP -
As per the reports of CMIE on Nov 25, 2016, there will be an estimated loss of 1.68 lakh crore to the economy. Some other resources calculate the loss at 1% of GDP (or 1.25L Cr.) and some even count it at 2% of the economy at 2.5L Cr.#9. Increase in Income Tax Payers -
"While Rs 21,000 crore have been found from department's searches, the balance of Rs 22,000 crore have been disclosed from various surveys," Mr. Hasmukh Adhia (Union Revenue Secretary) told reporters. He did not specify whether the money belonged to individuals or entities. "The department is currently busy calculating the tax to be imposed on this undisclosed amount," he added.Any Change that occurs on such a big scale brings uncertainties, insecurities and thus resistance. Issue of black money is not something new in India. Demonetization is just a simple step towards its abolishment but at the end it is responsibility of the citizen to refrain itself from any such practices.
Written by Deepak Sharma
An ambivert by nature and a keen business editorial reader. I believe - "Either write something worth reading or do something worth writing"