Demonetisation is a policy which is mainly formulated by our Prime Minister Mr. Narendra modi. This policy was brought by our prime minister in a very surprise way on 8th November 2016 and was implemented very successfully. And is called ‘notebandhi’ in Hindi. This was a very sudden move of our prime minister and the reason which was given to the people for such a sudden policy was that for the development and the growth of our country it is very necessary to rampant corruption as well as the back money. So that is why this policy was brought as well as implemented as soon as it was announced.
Demonetisation has occurred twice in our country one was in 1946, during the rule of the interim government under pandit Jawaharlal Nehru and the second took place in 1978 under the janta party government and both the time which the demonetisation which took place was to combat tax evasion through back money. And now the demonetisation took place under the modi government which is known as one of the powerful government till now who has done a maximum development in our country.
There was no such announcement of the government that pm modi is going to declare this but the experts says that the process of demonetisation process might have started 10-8 months before the announcement made by our prime minister. Because as per the plan of pm narendra modi if this policy was to be implemented overnight then it was also necessary to print new currency notes and also the alterations to the ATM machines. So in early November 2016 the narendra modi announced the demonetisation of Rs. 1000 and Rs. 500 and also the issuance of new Rs. 2000 and Rs. 500. And a specific time was allotted to the people to the people to exchange their notes that were 30th December 2016. As government decides that 50 days will be enough for the people to exchange their currency notes as and the government also wanted to catch hold of corrupted people in our country. There were many other things which came out that the linking of KYC to the account was also made compulsory and withdrawal limit was also set that was Rs. 25000. Huge amount of changes were made related to this policy as this was the masterstroke which was made by our prime mister narendra modi and in a layman language it was a ‘surgical attack’ on black money.
Demonetisation has a very huge effect on our Indian economy. People started flocking to the bank for the exchange of their currency. And people also started standing outside ATMs and banks for the withdrawal and exchange of their currency notes. Bank employees also started working overtime and there was a lot of burden on them. India is not only country to introduce demonetisation in the country but Europe as well as the Zimbabwe to eradicate their hyperinflation. This policy can also be used to promote the “cashless economy” in our country. By the way of cashless economy people can pay money by the way of their mobile and then there will be less usage of cash transaction in the economy.
In India there was a very big amount of black money/ fake currency which was caught by the government and there were some smuggled money also which was brought from the terrorist neighbouring countries and also some existed within India. As all these notes to be deposited in the bank and the people who have the fake currency will have no other option only to burn them. Demonetization is not only the option to counterfeit the fake currency but it removed maximum amount of fake money from the country. On the other side we are also seeing the positive impact on the people of our country as there are lot of foreign investment which a being done in our country as they are also seeing that the government of our country is trying to remove corruption from our country. There are many advantages as well as disadvantages which the government is facing they are as follows.
The major achievement was that it helped the government of our country to track black money and also the corrupted people in our country. Due to this policy government was also able to see the exact amount of income of the people as people were depositing money in their account and with this tax evasion will also not be there so that government can do betterment for the people of our country. Another benefit to the government was that now the government is trying to bring cashless economy so that there should be minimum use of the cash transaction. The government was also successful in encouraging people to use digital means to promote cashless transaction for this they have also made several mobile application which are very easy to operate and to understand it.
There are certain drawbacks such as it has created chaos among people as it was related to their money which is now a basic necessity to everyone everyone started rushing to the banks and there were some times when banks also do not have sufficient cash to provide it to the people. Another disadvantage is that a lot of destruction took place that is destruction of old currency notes and printing of new notes. All these cost were borne by the government and it also costs very high to the government. Another problem is that as it was good for the people who are having black money but the people who do not have black money but have rotated their cash in their assets are also getting affected.
So at last if any policy has some advantages then it also has the disadvantage and this demonetisation has changed the face of our country.