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Historical Parameters of Demonetisation in India

Essay by   •  January 10, 2019  •  Essay  •  372 Words (2 Pages)  •  826 Views

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I would like to open up this discussion by touching upon some historical parameters of demonetisation. In the night of 8th nov prime minister narendra modi announced demonetisation of 500 & 1000 rs note and pulled back 86% of currency from the system.

He is the third prime minister to announce this move. In 1978 morarji desai announced demonetisation of 5000 & 10000 rs note but it accounted for only 16% of total currency. So it hardly affected indian citizens and before this it was announced in 1948. Firstly, Demonetization in India was done to finish black money and make the fake currency valueless.

So there were a lot of debates across the length and breadth of the country about this topic whether it was a successful move or not but now it is official. Demonetisation is a complete failure.

Gov had anticipated that 3L cr currency would be pulled back from the system. But recent RBI report clearly says that only 16000cr is still out.

(Someone will talk on digital india or cashless transactions)

My dear friend I completely disagree with ur stereotypical remark about cashless transactions. Gov was highly embarrassed. As soon as gov failed to achieve the desired goal wot it had set before demonetisation, it kept changing the goalposts. Like digital india cashless india . Cashless india was the biggest gamble played by gov. Gov demonetised 15.6L cr of currency but it printed almost 18L cr currency only in two years. Again this goalpost havnt worked. I mean the funniest part of this demonetisation move was, many ministers including chief minister of Maharashtra who is considered to be the most educated chief minister of the country, started comparing ATM que with national duties and that is where gov again tried to use its trump card of nationalism to cover the failure of demonetisation.

I would like to stress upon the important aspect of failure of demonetisation. According to bloombergs black money report only 13.5% black money was in cash. Other almost 86.5% black money is in the form of shares, or invested in real estates or in form of gold. So this move was only to fight against 13.5% black money. & government deliberately kept winking on those 86% of black money.



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