Question

introduction on demonetization benefits for debate purpose

Answer 1

The countries which wants to blow Indian economy generally does it by introducing the Counterfeiting currency. It is the major blow for them.Terrorists and naxallites, they are majorly financed in cash and that huge cash is stored somewhere underground, now since legal tender has been taken away, hence the stored cash converts into piece of paper.Money hoarders have an option, either convert them to white or permanently hoard and use those notes to make fire during winter.All those money hoarders, they did not evade just tax but these cash is earned by some wrong ways especially at the stake of a country. Now the govt has chance to investigate and put them behind bars.If demonetization worked correctly, then there should be lot of money in the treasury(those seized from hoarders). The major advantage comes here, things can get cheap and affordable, govt can think without constraints, govt schemes be implemented smoothly, govt works can be completed without delays. At the end of the day, people are benefited.

AGAINST

The biggest disadvantage of demonetisation has been the chaos and frenzy it created among common people initially. Everyone was rushing to get rid of demonetisation while inedequate supply of new notes affected the day to day budgets of citizens. Banks and ATMs witnessed long queues while small businesses suffered temporary financial losses. The situation was even worse in rural India where people struggled to exchange and withdraw cash due to lack of enough number of banks and ATMs in their vicinity.Another disadvantage is that destruction of old currency units and printing of new currency 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 demonetisation.Another problem is that this move was targeted towards black money but many people who had not kept cash as their black money and rotated or used that money in other asset classes like real estate