Sunday, December 4, 2016

Demonitisation - Old 500 and 1000 INR not valid any more

Is Demonetization a good thing or a bad thing?

Recently, I have read a lot of positive and negative news:

Major Positives:

  1. Black Money will be eliminated for now.
  2. Terrorism activities will be curtailed for at least 3 months (in Srinagar, daily activities like stone throwing, bombing etc have been reduced and people have come out in public and schools have been reopened, maoists and naxalites activities reduced)
  3. Inflation will be reduced.
  4. GDP will grow.


Major Negatives:

  1. People who have been standing in ques for countless hours (This might be also to the fact that lot of black money might be distributed to various people who come to stand in line to deposit and to take the deposited money)
  2. 60+ people dying (This is not Government's fact.  It is the mob's fault)
  3. Small business affected, probably. We have to define small business, today even vegetable vendors make more money and evade tax. Businesses who come to our house regularly, selling petty things, who make less than 2.5 lakhs per annum, who do entirely based on cash transactions, will be affected due to shortage of money for a short term (6 months).
Analysis 


  • Left people argue to bring black money from foreign sources.  Right people says that due to difficult international laws and still they are working on it, will take some more time.
  • Left people are asking to release the list of people who have foreign investments.   Even I feel releasing the list is a bad idea.  Right people have assigned SIT team to investigate and will inform the court to action.
  • Left people argue that in the source of SIT team forming 8 points there is no place it has mentioned to remove 500/1000 Rupees note.  My question is why should we only need to follow those 8 points alone?   Why not we do what makes more sense?
  • Another question I have is why Mamta Banerjee is shouting so much?  What is wrong with her?  She is saying she will remove Modiji from power?  Is she so much affected or she is really caring for the people?  If she is caring for the people what steps or idea she has suggested first to come up for minimizing the pain? (Please don't say it is not my problem, because I didn't implement it)
  • Left people argue that farmers are affected.  They are not specific on how people are affected.  Though I agree to an extent there will be some inconveniences for them initially, in the long run it is good for them only. 
Conclusion:
  • People feel demonetization is good.  Intentions are good.  People want to remove the parallel black economy.
  • However, the way it has been implemented lacks sound planning.  They should have kept more ATMs and printed more 100, 50, 20 and 10 Rs. denominations first and released them.

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