As India completes one year of Demonetization, the country still remains divided on its opinion that whether this move of Prime Minister Narendra Modi was conducive to the economy or has it crippled it even more.
While it would be extreme to say that India has performed very well on the economic front, the move has been nevertheless impacted positively in swiping out the black money market and has been a decisive blow to Terrorism and Naxalism.
Why has Demonetization been a multi-dimensional success?
The high denomination notes were tracked down by about Rs.6 Lakh Crore.
It was India’s highest ever mission of scrapping out the black money from the system paving the way for a transparent economic regime.
Companies which were dealing with black money were uncovered.
It paved the way for direct transfers of salary into the bank accounts of the workers and the salaried class.
It resulted in the massive cleaning up of the highly messed up India’s Financial System.
As it was big blow to Naxalism, stone pelting incidents were down by 75 percent and incidences of Left-Wing Extremism fell more than by 20 percent.
However, it was met with severe backlashes by the Opposition and other parties terming it as a thoughtless move by the Prime Minister.
The views regarding the demonetization drive were as follows-
Common livelihoods destroyed!
A thoughtless act by the Prime Minister
It led to the suffering of the poor.
Some of the parties even wondered that what was the reason to celebrate?, when the Nation is suffering so much.
Some even referred to it as a big scam by the Government. And a complete disaster for the economy.
What exactly was demonetization and how was it implemented?
Demonetization means that the Reserve Bank of India has withdrawn the old currency notes of a particular denomination as the official mode of payment. This was not the first time demonetization has been introduced in India. It was carried out in the year 1954 by the then Prime Minister, Morarji Desai in a move to counter the black money. He declared the Rs.100,Rs.500, and Rs.10,000 as illegal money.
Why has there been mixed views over Modi’s Government move of Demonetization?
Demonetization, no doubt brought more money into the banking system paving the way for transparent deals. A large number of people went on to sign on digital platforms, which was the primary motive of this move.
However, the common man suffered to some extent. We take a look at some of the examples-
As soon as Prime Minister Narendra Modi announced his decision of scrapping the notes, there was a sense of panic among India’s common man. It meant that they had to deposit their old notes in the banks which led to long queues and long working hours which resulted in some level of chaos.
Food markets froze, people were unable to buy the basic medicines.
There was a drop in the production of small and medium scale Enterprises.
Although the Government has assured that the new Rs.500 and Rs.2000 notes would be introduced, it only came into circulation after a long time and which took months to complete.
Bank Managers were stuck dealing with the common man who was angry, frustrated and impatient.
Traditional forms of trade were affected.
The Final Conclusion
Demonetization was carried out for the long-term positive effects of the economy and some amount of hardships in the short term was expected. Politicians, economists and the common man were divided on the views that demonetization was not necessary. However a final conclusion cannot be made on the same. No policies can hit the bull’s eye and neither can it be a total failure.