Mumbai: It has been a year today and we call it ‘DeMo’ anniversary and we all are very well aware with what mind-set it emerged and a made a mark in the Indian history. All the 500 and 1000 rupees currency was declared non-legal tender and new currency of 500 and 2000 rupees was flushed in the economy in order to evade black money and bring in transaction transparency. But now the point is has Indian Prime Minister Narendra Modi‘s decision of demonetization been a successful thought? Let’s take an overview of the pros and cons of this initiative.
When we take a microscopic look, will find that the move had huge disruption on everyone’s lives. Most of the people encountered problems while accessing cash for their daily needs, with pictures of serpentine queues outside banks and ATMs becoming an essential staple of one’s daily routine.
It led to immense hardships for hundreds of millions of Indians employed by the country’s vast informal sector from the economy that deals predominantly in cash. Also, over 100 deaths were reported due to exhaustion after standing for long hours waiting for their turn to replace their rupee notes or make small withdrawals.
However, PM Modi’s supporters and his party, the Bharatiya Janata Party (BJP), hailed the movement as a good and necessary measure that “will clean up the system” Unlike the Critics, who have criticize it as a “silly” move that caused enormous pain to Indians, particularly to those in rural areas with little access to bank branch networks or ATMs.
Former Prime Minister Manmohan Singh, who is also an accomplished economist and the architect of India’s economic liberalization program, called demonetization an “organized loot” and “legalized plunder”.
Hence, the Value of the currency that returned to the system at Rs 15.28 trillion or close to 99% of the currency notes demonetized in November-December 2016.
The fact that more than 99% of the invalidated high-value notes came back to the banking system is widely used as evidence supporting the view that demonetization has failed to curb the Black money menace. However, an important question still remains that if there were no black money then what is the statistics of the money we heard and saw thrown, dumped, burnt, seized, confiscated, etc.?