Demonetization: The word which has gained more attention in recent times. None of us expected a shocking news on November 8th evening from our honorable Prime Minister. It was heard that Government had been planning regarding this demonetization for past six months; however we got only over night announcement.
The announcement was that currency notes of 500 & 1000 rupees notes will no longer be valid since November 8 2016. This is based on the belief that 500s and 1000 rupee notes are the main reason for Black money. Money has been hidden from the sight of Government and this leads to various economical problems and inflation in the country. To eradicate this problem, demonetization was considered to be the best solution.
Demonetization was explained as the process of bringing out the Black Money that was stagnant in the hands of Millionaires for years and years. Here, the question arises whether the demonetization worked as planned or failed to give productive result? Now, let us discuss about the pros, cons, nature and plans of demonetization.
- As the main motive of this move is to abolish black money, it is partially achieved. Black money holders really suffered to disperse their withheld money that they have been enjoying without paying tax.
- Eradication of fake notes is also one of the aims of demonetization, which has been effectively seen by the result of this action.
- In his speech Prime Minister Modiji has referred “From across the border, our enemies running racket in India through fake currency”, so demonetization has put a barrier in their access.
- The action of demonetizing has made a great benefit of diminishing the fake notes which will be a headache to the politicians if they are in idea of using their black money for election purpose.
- Demonetization also encourages cashless economy by reducing the withdrawal limit of money from ATM.
- Since, the declaration was made overnight, it affected the public in many ways. They had the fear of exchanging the currency notes at their hand, and they had to wait in long queue before ATM to withdraw the amount etc.
- Common people had the risk of owning fake currency notes without their knowledge, which will not be accepted at banks. This is a real loss to them and their hard work.
- Issuing of 2000rs note will cause a drawback in later days. Because, the main idea of demonetization is bringing out the black money in form of 500s and 1000s. If these notes are replaced with higher denomination 2000rupee notes, there is high possibility of stacking money.
- Black money that is invested in form of Gold and Foreign currency will never be brought out.
Though it was well planned, the execution of plan doesn’t seem to work well. It was promised for a New India after 50 days of this demonetization. However, we still couldn’t come out of the abnormal situation of withdrawing our own money and making transactions like before.