On 8th November 2016, Govt. of India announced the demonetization of all 500 and 1000 banknotes of the Mahatma Gandhi series in an unscheduled live televised address. It mainly aimed to curb black money, fake currency, and corruption but proved weak to shake the kingdom of these bad friends. Black money is the unaccounted, illegally recorded, offline and the dead money. Note-ban was the misuse of public faith. It was felt that if other decisions of this nature come, the democracy will burst to turn into a monopoly .
No smart homework for the implementation was done and rather very less time taken. So to say, ten hours work done in six hours.The thinking twice and right got no place. The implementation program faced loopholes by administrative team resulting in deep lack of liquidity in the system. Too much or too less cash, both are dangerous. As a crucial reason of inadequate new currency, the post demonetization was not handled properly. Demonetisation, being a partly right treatment of the disease, compelled public to queue up to get own money in a limited quantity.total economic freedom was slapped .
Launching of new currency notes of Rs 2000 ( for the first time ) enhanced the chances of 50% more hoarding in comparision to old Rs 1000 note . Small currency discourage hoarding and creation of black money . Demonetisation shifted the liquidity from public pockets to banks . The Govt. kept the eyes closed to demonetisation failure report of many countries , like
Nigeria 1984 Economy Collapsed
Ghana 1982 Economy Weakened
North Korea 2010 People left with no food and shelter
The Soviet Union 1991 Soviet break – up
Myanmar Economic disruption
It was promised during 2014 Lok sabha elections to bring back the black money worth around 2 lac crores slashed in foreign banks. Rather demonetization declared to unearth the black money circulating within the country as a first step.
As per Reserve Bank Of India data on demonetization , nearly 99% of the old currency notes are backed as legally exchanged, which shows the proportion of black money held in form of cash was very low ……a little drop in the ocean. Additionally Indian economy faced a loss of 21000 crores in printing new currency notes. Apart from it, 104 human lives lost in queues of money withdrawal. General public faced the hardship but corrupt made windfall gains. Entire picture shows that the snake is still in the burrow.
Even after the lapse of 10 months of demonetization, the outcome reflects negative achievement of the target. It hardly attacked the black activities like high tax evading, corruption through bribery, high education fees and so on. Was there no other way than this to target black money and bring it to main economic stream?
As per the saying look before you leap, such announcements or steps need the deep study of all aspects and results before imposition.