On Tuesday evening of 8 November 2016,government announced the Demonetisation of notes of INR500 and INR1000 which probably lead to a drastic change and created crisis.
If we see by its definition demonetisation means the withdrawal or stripping of a coin,note or a currency unit.It occurs whenever there is a change of national currency and the current forms of money is pulled down and retired often to be replaced with new notes or coins.
It was initiated with the great motive and propaganda of stripping the Indian economy of its black money and get away with that black money .Also it was kept in mind that it would propel people to pay taxes for the mislaid and unexplained cash,to curb terrorism,and it would promote digital India and a cashless economy where you don’t have to worry about carrying all your money.
Well we’ve have had so much chaos all over India and heard varied opinions on the demonetisation act stating whether to say that this was a benefit or a total bummer.But lets not judge this act by opinions and diverse views but rather by facts and certainty.
If we see this act took place a total of three times in the Indian history till date reportedly 1946,1978 and 2016 to be the latest one.The prime minister announced that the Rs500 and Rs1000 will not be valid from 8th november midnight.All the banks and ATMs will remain closed on 9th november and all the rs 500 and 1000 notes are to be deposited into banks and post offices from 10th november to 30th december 2016.
Moving after all this,reports suggests that in 2016 SBI said that after a month of collecting they expected 2.5 lac crore currency out of 15.4 lac crore wouldn’t come back as the people holding black money would not show up for depositing money as the bankers would match their salary slips with the unpaid taxes and the culprits would get caught.And according to our prime minister they would flow out all the money in the rivers or would burn the money but to a surprise any of these didn’t happen and 99% of money came back.
In september 2017 RBI told that 99% currency came back and it was still on counting and in the duration of one year the 99% went onto 99.3%.
To the money that did not come back maybe the black holders converted and found ways of turning their black money into white or maybe some other measures to escape out of this because the estimated value of the money not returning back was much more. 15.44 lac crore currency was the worth value of demonetized money and 15.28 lac crore was returned to the banks.Rs16000 crore was not returned back into the banks.some news reports believed that RS3300 crore is kept in Nepal and Bhutan which the government cannot bring back.
As the motto of demonetization were of high expectations and promises including the stop on fake currency and terror funding.but in June 2017 fake currency of Rs 11.23 crore face value was detected which concludes that there was no impact of demonetization on fake currency;also if we glance over post demonetization there were several attacks showing that there has been no impact on terror funding according to some reports and analysis.
However demonetization was to curb black money some part of it has been successful in doing so.Of course everything has its own advantages and disadvantages,demonetization is no different.After the act if we see from differing perspectives the views and effects about its impact also differ.
For example;a student wouldn’t be much of affected,a small shop owner would be affected to bits,however a wholesale shop owner could be affected to a large extent because many transactions happened in cash.
If we see the aftereffects on the common people then probably the Middle class people and poor people got affected.Also rural people do their transactions in form of cash.
The income tax file returns report shows that the figures kept on fluctuating.Post demonetization there was loss of 1.28 lac crore in the first 50 days.Many economists also predicted the loss of GDP.to a shock more than 150 deaths occurred as people standing in long queues resulted into dehydration and many things.
In a nutshell after complete 4 years till 2020 we can see that demonetization hasn’t really improved anything other than it has caught hold of unexplained cash but it surely has done a lot of post damage .It may have given black money a lethal blow and has also made online transactions prominent which are useful in today’s times but it has been a mixed result for the other factors like terror funding and it was a failure in the informal sector which suffered the most probable dissipation in money.
By
Faiza
