Demonetization

Demonetization

Demonetization. This word has shaken India to its roots. Nobody would have expected this to happen. When the PM told us all this news via telecast I knew from that time India would not be the same. And so on the 8^th of November 2016 the 500 and 1000 rupee notes would be banned at could not be used in any place except for government hospitals, pharmacists and petrol pumps and Vodafone shops for recharge, but all of this for just a limited time.

After understanding the concept of the PM’s notion from my parents, I think I understood it pretty well. The country had a lot of black money circulating around and that is what was affecting the growth of the economy. People like doctors and shopkeepers who don’t have a fixed salary can get away by not paying their income tax. People like teachers and investment bankers who have a fixed salary have to give 33% of their earnings to the government as tax. But all these people are using facilities provided by the government but only a few have are paying for the upkeep of these facilities. Then when the government can’t take care of these things because of lack of funds people revolt and destroy even more things. Then they complain. It is their fault and then they conveniently blame our government. So you see the chain started by the people and then affect the people.

The PM’s notion was a good one and had good intentions but it was misinterpreted. People lined up and declared their wealth and for a day it looked like a brilliant idea. But the minute their new notes printed people started their hoarding and this same cycle started again.

I think the plan had intentions but was a badly executed one. For example the new notes are a little bigger than the 1000 rupee notes and all the ATM sender slots had to be changed for the new 2000 and 500 rupee notes. Second he should have known that everybody needs money for their daily routine for example fruits and vegetables, common household items and milk etc. and everybody uses the 500 and 1000 rupee notes. He should have foreseen the note shortage and what he could have done was asked the big printing presses around the world like Italy and asked for help. He could have printed new notes over there and flown them in cargo planes surrounded by military jets. That may seem impossible but it could just have worked.

Another part damaged by this decision was the lower and middle-classes of society. First of all people would have set aside money as savings but then they couldn’t use that. They are all also not that educated and do not understand credit cards or net banking and don’t know how to deposit their cash in the banks. Second, most of the menial workers are from villages and they have their bank account over there and have a lot of difficulty accessing it from the city.

So here I have given you most of the points for the pros and cons of this massive movement by the government. I personally think that the idea was good but the execution was bad. Well, we have to face the facts and accept what is going on in our society.

Considering the fact the lines are so long, anybody could have written more than this while waiting for an audience with the bank staff.