1 Year of Demonetization: The move which had shaken the Nation
To line up with the above statement, first of all, explore the clear view of Demonetization. The Act is explained as the process where current form of money is banned from circulation and replaced by new notes or coins. On Nov8, 2016, people of India had experienced a great shock when the ban of Rupee 500 and Rupee 1000 notes was announced on the TV channel. As these notes constitute an 80% of Indian currency, the ban on their circulation was surprising.
The move aimed at taking into account the various factors that hamper the growth and development of India. These factors include:
- Fake currency notes.
- By avoiding tax payments, lots of hidden cash is collected.
Positive consequences of Demonetization
- The Digital transaction has risen with its line graph showing the surge.
- Income Tax return filed in the year 2016-17 is increased by 25%
- Reduction of black money storage up to some extent.
- Use of online payment modes is increased after the demonetization.
- Import from China has been increased from 1.9 Lakh Crore to 2.41 Lakh Crore.
- Apps like BHIM, which was launched under government supervision, were introduced to cope up with the cash shortage problem.
- More than 50 Lakh laborers have their bank account active nowadays.
- The process of giving and take is now easy and efficient as it’s a matter of seconds to pay via an online app.
Negative consequences of Demonetization
- A Major part of Indian population still prefers paper money over online payments.
- The move really troubled the rural part of India. As people faced many problems while dealing with the sudden hardships of demonetization.
- Employment was affected after few months of demonetization, even 1.5 million jobs were lost as the after effect of this sudden move.
- The agriculture sector saw the worse phase as farmers were devoid of cash. Meanwhile, they had to cut the prices in half and also suffered the great loss.
- Printing cost of new notes was double the cost paid in a prior year. This has also shown RBI’s loss.
- After demonetization Economic growth in the starting phase of 2017-18 dropped to 5.7% but the estimated value was 7.1% for the year before.
For taking cash, to pay for the basic life needs, people have suffered standing in long queues. This even led to deaths while waiting for long hours. The memories of standing in those queues are now unclear and blurred as now the new reform like GST has been introduced. That time, Arun Jaitley allowed certain figure for high-value deposits made in particular time slot, that allowed banks to accept and exchange old notes. With new policies, the accelerated growth of Indian economy is expected.
People are busy in dealing with slabs commenced by GST implementation. It was predicted earlier that Remonetisation would surely take some time. People also dealt with it patiently supporting the move in the hope of something better to happen in the future of Indian economy.