Effects of demonetisation on the people of india
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Impact of Demonetization on India
A step that can turn the fate of India was taken by the honorable prime minister on November 8th 2016. The concept of ‘demonetization’ was introduced in India. The word demonetization refers to when a form of currency is stopped from Circulation. In the Indian context, the Rs 500 and Rs 1000 notes were called to be old, and replaced by the new version of Rs 500 an Rs 2000 notes. This step taken by the government of India had brought huge changes in the lives of a common man and the economic status of India.
Demonetization has both pros and cons just like two sides of the coin. The month of November was filled with jokes such as “The husbands will now find out the black money present with their wives, in India.” There has been a huge debate for the past months regarding the merits and demerits of demonetization. Certain Challenges were to be faced by everyone, but claims are made that this is for the benefit of the society.
The Indian economy saw bright colors after the introduction of demonetization. Black money was reduced. Obviously, people tend to safe their black money in the higher denominations of notes, that is, in the form of Rs 500 and Rs 1000 notes in India. If this step was not taken, this black money would have reached into the hands of terrorists and Naxalites to create a big chaos.
Counterfeit currency is printed mostly in the higher denominations. If this form of currency is stopped from usage, the counterfeit currency is to face its dark side. This step could remove 100% of counterfeit currency. However, a question arises on about the printing of fake notes of the new form of currency. Pakistan, one of India’s neighboring countries participates actively in the printing and exporting of fake notes to India. The Indian government has a solution for this too. The new Rs 500 and Rs 2000 notes have special features which is impossible to manipulate!
The Indian banking system strengthens. Demonetization obviously leads to more depositions in bank accounts and they act as savings. This can be utilized by the citizens of India further. This will enhance the liquidity position of banks and their money will be used by the Indian government for various purposes whose main aim is to serve for the betterment of the country we reside in.
When the process of transferring money is by using cashless methods, people tend to have belief of secure of their money. This increases the confidence level of foreign investors to invest in India, which leads to the economic development of the country. The GDP (Gross domestic product) of India will increases.
However, it would be wrong to call demonetization as a successful step. It has caused many problems among different points of perspectives. There are certain demerits that rose among the people of the Indian society. Common man had been the worst sufferers.
Imagine about elderly people who do not know how to transfer or receive cash through digital means. Demonetization acts as an evil in disguise in such perspective. They don’t have the strength to stand in long queues in front of ATM’s. This makes them very weak.
Demonetization has caused waste of time. Standing in queues for money makes it difficult for employees who have very less time. They face pressure from many sides such as offices and their families. This can turn a person fall into deep depression.
Unemployment has increased in the country mainly in the sectors of agriculture and small scale manufacturing. They depend highly upon the higher denominations of notes to buy their raw materials. In such case care of families will decrease.
Unemployment reduces the money present with a person. When a person has less money, availability of basic resources like food, water and clothes and medication facilities becomes less. These are the main factors that are responsible for death. Over 100 deaths are reported, which cause a social and human loss.
People claim this concept of demonetization as ‘richer getting richer and poorer getting poorer.’ The rich change their high denominations without any problems, unlike the poor. The poor have to now pay more taxes and less by the richer parts of the society.
The government of India has stated this step as ‘Short term pain and long term gain.’ This means it has both advantages and disadvantages. However, the conclusion, that is the cashless society will surely bring a huge change. The Indian economy is tending to see various sides.
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