In the awake of the latest decision by central government, wanted to write this article.
Nation wants to know is Demonetization – Good or Bad ?
What is Demonetization ?
In simple terms, Demonetization is the act of not considering a currency unit of its status as legal tender.
Why was it needed ?
There are many reasons why people speculate this was done. Out of all which below are the most valid ones
- Trying to bring in Black Money that people had hid. People hide money in 500 and 1000 Rupee notes, declaring it as is no longer a legal tender makes all the money hid as NULL and VOID
- Check on duplicate money printed and in circulation. Many fake notes are in circulation and this helps in getting rid of all these in one go.
- It is said that this duplicate currency and black money helps funding of terrorist and other anti-social elements who act against India.
Why is it Good?
- A honest tax payer would want everyone pay their tax. This makes everyone accountable.
- This reduces the burden on few sections of society.
- This helps in curb black money.
- Since the money that people accumulated for years have become null and void over night, they would think twice become accumulating such dirt money in the future.
- More cash in circulation and with Banks
- This has profound effect, with Interest rates going down, More money for small scale industries, more money for infrastructural growth, more employment opportunities, etc
- Real estate sector prices are likely to fall.
- Extremists and Terrorist activities were checked
Why is it Bad?
- People had to stand in long queues to withdraw money. There were restrictions with regards to amount of money they could withdraw from their own accounts.
- This caused genuine problem to some people as those who never had an account and did only cash transactions came to a standstill.
- There is an argument that major black money is in Swiss Banks and this move does not affect them in any way.
- News about Agents and few Bank personnel taking commission and helping people change their Black money
Things to keep in mind
- Farmers can exchange the old notes to buy seeds
- Railways/Airlines/Petrol pumps/ Utilities bill collection points accepted the old currencies till a particular date
- People were allowed to exchange their old notes for new ones through mobile exchanges/Banks/Post Offices
- People can deposit their cash in their banks till 31st December 2016
- If deposited more than 2.5L, people were called for verification
- Special allowances were made for people having Weddings and current account holders
Bottom Line: We need to wait and watch what benefits will a common man get out of this, who readily went to hardship in a hope that his future will be bright without BLACK MONEY !
Praveen Kumar E