I have written many essays, blogs, comments, postings and many articles on demonetisation before. I am just not sure what the effect of demonetisation will be in the future because the last demonetisation happened couple of decades ago, in the era of Indira Gandhi. The time, situation, economy, and environment everything has changed since then. That’s why we could only guess what the future effect of demonetisation will be. We have seen many demonetisations in recent times (in 1991 in Russia etc) but in case of India the situation is also different. We cannot compare the effect of demonetisation with these countries. Since, November when demonetisation announced (Note ban of 500 and 1000 rupee notes) we have seen tons of changes in Indian economy. We have seen the changes of RBI’s terms and policies in last three months extremely frequently.
Initially, I supported demonetisation, because the black money which was kept secretly in the house started coming out. This started happening couple of weeks. I saw the real estate brokers and sellers, hawala marketers are nicely effected the demonetisation move because most of the transactions are happened through paper cash. Not only this, all the paper cash business to avoid banking transactions have been effected badly and they started accessing bank accounts. They immediately started use of debit cards, credit cards, payee checks etc for business. So, govt. now can track the money flow. This all was very good. I really liked them initially.
However, my question is how would you will track those who are transferring their black money into land or gold or any other form of fixed asset? Let’s see an example - I have earned 1 lakh each day and this ultimately I earn more than 3.5 core rupees each year. Then I purchased 3.5 cores worth land. Virtually I dont have any black money. Actually I have transferred the money to another form of asset. How you will track me? You can track me but how you will target me through demonetisation? The note ban actually could track only paper money that is current asset. If someone have black money in form of asset like land or gold, note ban is not going track him anyway. This way note ban actually could only track 5–10 % of black money throughout the country.
I cannot deny that middle class people were harassed, some hundreds of people died due to note ban. I just did not care because I thought that loss of 1 will be gain of 100. After all, at a point in January, 2017 it seems to like note ban a complete failure and no successful any way. There will some obvious future gains. They will be following –
Inflation is now extremely low.
Etc and there could some more benefits probably I don’t know.
At last, the rich 1% of Indian has 60% of country’s wealth. If govt. truly want to work for poor. If govt. truly helpful for poor, if govt. truly want to remove the wealth imbalance/ economic imbalance in the country, govt. will take more steps in order to counter this.
Let’s see what future have keep for us.
Initially, I supported demonetisation, because the black money which was kept secretly in the house started coming out. This started happening couple of weeks. I saw the real estate brokers and sellers, hawala marketers are nicely effected the demonetisation move because most of the transactions are happened through paper cash. Not only this, all the paper cash business to avoid banking transactions have been effected badly and they started accessing bank accounts. They immediately started use of debit cards, credit cards, payee checks etc for business. So, govt. now can track the money flow. This all was very good. I really liked them initially.
However, my question is how would you will track those who are transferring their black money into land or gold or any other form of fixed asset? Let’s see an example - I have earned 1 lakh each day and this ultimately I earn more than 3.5 core rupees each year. Then I purchased 3.5 cores worth land. Virtually I dont have any black money. Actually I have transferred the money to another form of asset. How you will track me? You can track me but how you will target me through demonetisation? The note ban actually could track only paper money that is current asset. If someone have black money in form of asset like land or gold, note ban is not going track him anyway. This way note ban actually could only track 5–10 % of black money throughout the country.
I cannot deny that middle class people were harassed, some hundreds of people died due to note ban. I just did not care because I thought that loss of 1 will be gain of 100. After all, at a point in January, 2017 it seems to like note ban a complete failure and no successful any way. There will some obvious future gains. They will be following –
Inflation is now extremely low.
- Real estate, hawala and some more market who used to deal whole transactions through paper cash have been effected. The real estate priced dropped and now within the limit where middle class could effort easily.
- Fake currency zero, this will also decrease the effect inflation.
- Cashless economy is now boon. More cashless transaction means govt. could now track more.
Etc and there could some more benefits probably I don’t know.
At last, the rich 1% of Indian has 60% of country’s wealth. If govt. truly want to work for poor. If govt. truly helpful for poor, if govt. truly want to remove the wealth imbalance/ economic imbalance in the country, govt. will take more steps in order to counter this.
Let’s see what future have keep for us.
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