Not so long back in 2014 the government of India launched a new scheme named Pradhan Mantri Jan Dhan Yojna which encouraged people to open their bank accounts and that could be done even with zero balance.This scheme got huge response on the day of inaugration 1.5 crore (15 million) accounts were opened.But many choose to remain unccounted.
In September of 2016 the government of India which gave oppourtunity to the Indian citizens to discolose their undisclosed assets not only that but the government promised that no questions would be asked to the person who discloses their income,but many preferred not to disclose.
On 9th November the Prime Minister announced demonetization of 500 and 1000 rs notes which means that all 500 and 1000 rs notes were no longer leagal to perform any financial trade.But the notes were allowed to be exchanged and deposited from the banks ,postoffice with in 50 days .
Soon after demonetization was announced public rushed to banks to exchange money .For two days banks were closed and when banks opened huge crowd was seen in queues to exchange old notes and deposit money.
This major step of Indian government is to curb corrupt practices ,funding of terrorists and also the circulation of illegal currency notes .Demonetisation will boast bank deposits and savings which will replace the high cost of borrowing and lower the overall cost of funds.It will also help in financial inclusion ,it will help the people with new accounts to inculcate banking habits of which they are unaware off.It will make Indians digital and now everyone will transfer to plastic money i.e smart cards.The difficult time for the people came who had undisclosed income and corrupt earings.
The Indian government has taken a great initiative to merge parallel economy into mainstream economy.However by this desicion the government has faced huge critisicsm specially by poor and uneducated class people who don’t understand how important this initiative is for the Indian economy for long run.
This decision is also to shut up the foreign media who have false information about Indain corruption ,the same media fails to tell that the government of India was encouraging its citizens to open bank account from long which people failed to open.
Even after demonetization the government is still encouraging people to open bank accounts and receive salary in banks and in this way making citizens digital.This move is benifitial for small wage worker for example worker earning daily wages their salaries will be on time the will be able to complain to the concerned authorities in case of non payment by the employer .Not only that they will be able to enjoy the benifits of industrial act and will be able to have Providient Fund (PF) .They will also enjoy free mediacal treatments from the Employee’s State Insurance Coorperation and government colleges.
Due to demonetisation all kind of big and small crimes have almost stopped.Due to demonetisation we will not see the changs in the country’s economy overnight ,but this will surely lead to bigger tax to the government which will help India to grow at faster pace due to big Infrastructural Developements .Bigger revenues means bigger budgets and bigger budgets means bigger growth.
There are drawback of this desicion too-
Firstly the government of India has made an ammendment in the Anti- Corruption act according to which the Central Bureau of Investigation (CBI) can’t investigate any government offical on corruption charges which means the CBI can’t investigate any central government employee from peon to higher post official without any authourity.
Secondly from now there is an exemption that if money is from donation boxes of temples the government will not ask any questions .This will make a temple a money laundring hub.
There are proofs that some people knew about this scheme and so they used their money to buy assets .
According to government the demonetisation will help to restrain the corruption practices ,but with the coming of higher denomination notes the corruption practices are going to be increased as higher denomination notes will be easy to carry and the police could not catch the person easily.It is said that the countries with higher denomination notes the corruption practice are more likely to increase.
Lastly problem faced by people . People have to stand in long queues to deposit or withdraw money from bank .They are facing serious problems .Most of ATMs allow the withdrawal of only 2000rs notes.And people can withdraw only once from any ATM in a single day.
As every coin has two sides ,likewise this demonetisation can be taken in both postive and negative ways .It depends on from person to person depending on their situation .According to me “Something which is forced does not last for long”.It may be benificial for some people but as it is forced and at the same time people are facing problems so this demonetisation process does not stand on ones expectations.