“The Great Cash Clean-up: DEMONETIZATION”
- BODHIANS
- Jul 22, 2019
- 3 min read
-The Indian express
This is an analytical piece of writing which focuses onto the adverse effects of demonetization in India in the year 2016.
Demonetization is a situation where the notes of a certain denomination are banned and are no more acceptable as legal tender (mode of payment); they are replaced with the new currency.
India has a very rich history both culturally and heritage wise, however it has the same rich history of demonetization. India has experienced four demonetization till date. First in 1946,second in 1954, third in 1978 and fourth was in 2016. The major reasons for demonetization have been: to curb fake currency that aids terrorist activities, to render black money useless, and to promote cashless economy that is free from deceitful manipulations.
The last demonetization that was announced on the 8th of November 2016 was no less than a bombshell being dropped by the Prime Minister of the country,Mr. Narendra Modi. He declared the demonetization of rupees 500 and 1000 notes on the pretext of curbing corruption due to fake currency and black money. This stopped the country in multiple ways and became one bitter pill to be swallowed by every single Indian.
The lives, for a good number of days, came to a standstill. The most affected lot, the middle class people, were flabbergasted by this declaration; the action was intended for the corrupt, but common man was troubled the most.Some supported this while many were raged for different reasons. Of course, those who were the targets, were left dumbfounded and frenzied.
Banks were operational for day in and day out where see mingle never ending queues of desperate people who wanted to exchange the old currency to new, became a regular sight. 70% of ATM's across the country had gone cashless. In addition to which there were constant changes made into the banks and the limit of currency exchange; this was cumbersome for service class people who had to find time from their jobs to get the money exchanged.
People who had accountable income could get the money exchanged;undisclosed black money would be difficult to get converted into new currency. There were instances of burning the old currency notes by people for which no accountability could be proved. This money was mostly black money, but it was also discovered that the money saved by the housewives discreetly and secretly lost its value.
Demonetization failed many common people in their endeavors. Farmers suffered a good deal. After 2 long years India had a good monsoon, farmers were happy and looked forward to buying seeds, fertilizers etc. Their plans were ruined because of this; the poor peasants, who did not have accounts, committed suicides on realizing that the money they had was worthless.
Marriages were postponed; money spent on decorations and other arrangements went down the drain. This caused numerous deaths. Sukhdev Singh died of a heart attack in Punjab four days before his daughter’s wedding, as he couldn’t buy groceries and necessities. A 50-year-old Surat woman committed suicide because she was not able to buy groceries for her family.
People who never gave a single penny to beggars started giving them notes of 500 and 1000, mostly the unaccountable income, but even they refused to accept them.
As a measure to provide relief, the government announced that the toll taxes would be exempted; medical shops, petrol pumps, jewelry shops, railway and airline bookings, metros and hospitals would accept old notes till a certain date only. People, with unaccountable income, started spending on booking holidays and tours. General public started buying a major chunk of general medicines, sanitary napkins, and medicines for their long term diseases like diabetes. People started visiting hospitals more often for almost every check-up possible but the doctors themselves were in bank queues!
According to the government, the success rate of this action was high; RBI reported that 99.3 percentage of the old currency was exchanged. On the contrary, demonetization which was initiated as a tool to curb black money, devised an easy way to enable people with black money to convert it into white and a significant amount of black money was exchanged with the new currency. Is this success of the government or the corrupt, or failure of common man?
Gone are the days when people shoved whole host of money in gunny bags. In today’s world, there are refined ways of laundering money or stashing it away into assets like properties, businesses, jewellery, offshore bank accounts and foreign currency.
Common people were just rats to an experiment which was drastic failure.
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Acknowledgements:
by-pari raj gupta
IGCSE(2018-19)
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