Demonetization Left People with Less Cash Instead of Cashless!
Demonetization and black money are the two sides of the same coin. Indian black money has been used to make a large number of cash transactions to purchase gold and real-estate. And the term is no novelty in India. We have seen demonetization earlier as well. Reserve Bank of India scrapped off the highest currency ever printed, that was the Rs. 10,000 notes in 1946. But the movement created a turbulence this time. In this article, you will get to know about the ‘Real’ pros and cons of the demonetization drive by our current Prime Minister, Narendra Modi.
It was the fateful night of November, 8 when people were met with a shock that current 500 and 1000 notes will no longer be a legal tender. This was considered to be a master stroke of PM Modi against corruption and counterfeit currency coming from the western neighbours. In place of the scrapped old currency notes, the new redesigned 500 and 2000 denominations with better safety features were introduced. The old 100, 50 and 20 notes will also be redesigned with better features. The move was made to render the unaccounted money useless; mere pieces of paper. The point is, cash contributes to the major part of the unaccounted money.
But people are facing a more insurgency in the present time demonetization due to a clear fact. Earlier, back in 1978, the majority of the people never had such large currency with them. So, they didn’t face any hardship when such a large currency had been rendered illegal in just one stroke. Demonetization of Indian Currency is getting the sour remarks from the common citizen of India, but it will have the positive impacts in the long run. Let’s discuss how.
Pros of Demonetization
This move has evidently brought many corrupt individuals to the sleepless nights. People holding black money in cash are running hither tither in the fear of losing their ‘not so hard-earned’ money. On the other hand, the agencies who have been making the counterfeit currency has been put to halt as well.
Another remarkable benefit of demonetization is that people are slowly drifting towards the cashless transactions. Cashless society will increase the credit access and financial inclusion. All the money and transaction will be under the watchful eyes of the government.
The arm dealings and smuggling will not take a breath anymore, as it is harder for them to make the transactions in soft money. And not only this, it will also reduce the tax avoidance. This is a bad news for the tax evaders. So, in the long run, demonetization is going to benefit us, just like a bitter medicine for our own good health.
Cons of Demonetization
The freeze in the Indian economy, which can be seen these days will be of negative impact across sectors which involved a large number of cashless transactions. For an instance, real estate, jewelry, retail, luxury brands, cement, groceries, etc. has been facing a short-term instability. The companies under the debts will be facing even more pressure.
The cost of replacing an old currency is massive. The cost of operating the ATM’s will be a huge burden on the banks. For the initial months, it is being difficult to make cash transactions. But the efforts are being made to reduce the inconvenience of the people. It is expected that the Indian GDP growth will be crashing down to 0.5% in the second-half of the financial year. But we have to look at the long-term benefits of demonetization.
We’re not sure whether India is going to see the ‘Acche Din’ under PM Modi’s governance. But this fierce move is definitely going to bring respite to the honest wage workers.