Question

debate on demonitization

Answer 1

Debate On Demonetization is Given below, At first there is introduction part, then there is part of demonetization for the motion and then against the motion of demonetization.

Introduction to Demonetization:- At first Demonetization refers to as discontinuing or stopping or banning of current currency units and replacing those currency units with new currency units. It is a major decision and it impacts all the citizens of the country because overnight all the money you have become a piece of paper which has no value if you do not exchange it with new currency units or deposit it in the banks. We have example of our country India when the government scraped Rs.500/- and Rs.1000/- Notes and declared to introduce new notes of Rs.500/- and Rs.2000/-.

For favour of Demonetization:-

Demonetization helps in the government to track and punish people who are having large amount of unaccounted cash on which no income tax has been paid because many people who earn black money keep that money as cash in their houses or in some secret place which is very difficult to find and when demonetization is declared by government all that cash become useless and they have no value in market, such people have two options, First is to deposit the money in bank accounts and pay taxes on such amount and second option is to let the value of that cash reduced to zero and continue the money to become useless.
Black money is used for illegal activities like terrorism funding, gambling, money laundering and also inflating the price of major assets classes like real estate, gold without the awareness of banks and government and due to demonetization all such activities will get reduced for some time and also it will take years for people to generate that amount of black money again and hence in a way it helps in putting an end this circle of people doing illegal activities to earn black money and using that black money to do more illegal activities.
Another advantage is that due to people disclosing their income by depositing money in their bank accounts government gets a good amount of tax revenue which can be used by the government towards the betterment of society by providing good infrastructure, hospitals, educational institutions, roads and many facilities for poor and needy sections of society in this way Demonetization plays an important role in removing the corruption in a very good way.


Against the motion of Demonetization:-



The biggest disadvantage of demonetization is that once people in the country gets to know about it than initially for few days there is chaos and frenzy among public as everybody wants to get rid of demonetized notes which in turn sometimes can lead to law and order problem and chaotic situation especially in banks and ATMs which are the only medium to change the old currency units to new currency units.
Second disadvantage is that destruction of old currency units and printing of new currency new units involve costs which has to be borne by the government and if the costs are higher than benefits then there is no use of demonetization.
Third problem is that majority of times this move is targeted towards black money but if people have not kept cash as their black money and rotated or used that money in other asset classes like real estate, gold and so on then there is no guarantee that demonetization will help in catching corrupt people.
All things get mess up and it takes a lot of time to recover from this situations.

----End of the Debate-----.

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