On 8th of November in 2016, Indian Prime Minister announced the demonetization of the ₹500 and ₹1000 currency notes.
The economic experts are still debating whether that decision really benefited the country or not. At that time, various banking sector experts praised this move.
But recently, there were reports published regarding the demonetized money. The reports clearly stated that about 99.30% of demonetized money was back in the banking system.
So it the demonetization has completely flopped? was this a poor economic decision? isn’t there any positive about the decision? Let us take a look.
The Negatives of the decision
- People who didn’t have a clue about online transactions had to wait for the decision regarding the amount which was very low at the start to do the transactions using cash.
- According to the report in 2017, Center for Monitoring Indian Economy said, several of the people have been unemployed because of this reason.
- Agricultural transactions are mostly done in cash and this decision affected most of the farmers in the country.
- If you consider small industries, the negative effect was huge. Because most of the transactions were in cash.
- Several deaths due to standing in long queues for more time.
- Also, if the reports are saying that 99.30% of the money is returned to the system, there is a big question that is the real motive behind this decision is satisfied or not?
- The use of digital transactions has been increased. According to a report from economic times, users added approximately 82% more money in their e-wallets than before the demonetization.
- Use of e-shopping using cashless transactions has also been increased significantly. And the use of cards has increased more than wallets.
- The decrease in spending money in the wrong way. People have spent money only on the things they required.
- There were many fake companies in the market and this decision has helped to shut them down.
While there can be some positives and some negatives of this decision, there is one big question is whether the demonetization has succeeded or not. The main motive of finding black money has been satisfied or not?