Impingement of Demonetization

by Blog | 08-11-2017 | 492 views

Not many of us will so easily forget the date November 8th as it embarked the date where Indian Prime Minister, Narendra Modi declared that all 500 and 1,000 rupee notes would cease to be legal tender in a surprise television announcement. Demonetization as it was later called had literally given everyone a run for their money. The initial intention of the idea was to eliminate fake Indian currency notes, curb terrorism, and force out stashed cash people had hidden to avoid paying taxes. One year later, it needs to be said that none of these 3 agendas have borne fruit the way the government intended. The only motive that even came remotely close to a positive outreach was that the number of income tax returns filed for 2016-17 year grew by 25% when compared to 2015-16. Another sector that benefited highly were the digital wallets platforms such as paytm, payumoney etc. Paytm which was hardly heard off before this, had an 105% in its registered users.

Talking about the draw backs, the list is quite long. The primarily cash-reliant rural economy of the nation was totally wrecked following the demonetization stunt. This spilled over to other sectors such as agricultural sector, production and employment. Reports reveal that nearly 1.5 million jobs were lost in the first four months of this year. The Indian economy slumped to 5.7% compared to 7.1% in the same quarter of the previous year. If all this was not enough, the RBI suffered a loss of nearly $450 million printing new currency notes. Former Prime Minister Manmohan Singh, an accomplished economist and the architect of India's economic liberalization program, even called the entire ordeal "organized loot" and "legalized plunder." I urge the entire youth of the nation to let bygones be bygones and stand together against any such future endeavors.

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