The historic decision of Nov 9, 2016 to demonetize currency notes of Rs. 500/1000, which represents 86 %of the total currency in circulation, was ‘overdue’ since the last time in 1978.
Many reports suggest that it has resulted in shrinking the size of the parallel economy and black money tremendously, at the least by 20%. and likely to be more in the coming year as follow up measures indicate .The business of counterfeit currency is almost 80,000 crores which has been pumped by ISI and our enemies has been badly hit and almost stopped for now. The terror funding by the enemies across the border and the illegal mafia activities, communal riots, human trafficking, including Naxalites activities have been extremely reduced for the time being. The huge inflow of the cash money into the banks thus into the economy, has resulted into loan interest rates going down and lowering the cost of doing business and making more affordable the products.
It is well known that many political parties are the biggest hoarders of the black money. Now, we may see a better election process and the fair practices in the upcoming assembly elections in a more democratic ways. The cash deposits of over 14 lakhs crores after this move which will very positively impact Indian economy and improve the GDP by at least 1.5%. People are becoming hopeful that there is likely increase in public expenditure due to more tax collections which govt. will be spending on infrastructure, health, education, social welfare schemes and creating job opportunities.
The demonetization move has been seen as a “Masterstroke” by many among us. Is it a Masterful enough?
This mammoth tasks lacked in the great detailed planning as seen by the long queues at the banks for many weeks and the empty ATMs. It caused public inconvenience in many medical emergencies and health issues, the wedding seasons was also around the corner. In rural area, the banking structure was not sound enough to support this transition. As 90 % of the Indian economy is on cash, this cash crunch has the worst impact in the service sector and would continue for more months .Ongoing period is high activity for agriculture is a major concern and have felt the big pinch. There is a fear of return of “inflation” contrary to the fundamentals that it should go down after demonetization. So we could see short-term pain for India’s economic trajectory but eventual long-term gains for Indian economy.
“Black money is not synonymous with corruption; it is rather one of several symptoms of corruption”. This intervention is a one-time draining of this current stock of black money but unless the root causes of corruption are removed, corruption will continue. It is sort of like a dialysis, more of a short term cleaning up than a solution of the problem. It needs to be repeated periodically. More enforcements and tightening of the laws and regulations is required on ongoing basis to get rid of the menace of the corruption.
Digitization provides equal access to education and communication. Digitization also ensures that the public goods and services are reaching people cost effectively and timely in an efficient manner. Whether it is banking, railways or even Public distribution system or any public utility service, it makes their delivery faster and easier to keep track with. People can now do almost everything online, to apply for a PAN card, passport and to book a railway ticket or pay bills they no longer need to stand in long queues. There is also an online grievance system for almost every service and therefore people’s problems are now better attended because everything is now recorded, monitored and tracked. We have even seen People directly tweet the grievance to the concerned minister, the role of Smt. Sushma Swaraj, MEA Minister is exemplary outstanding and extra ordinary and getting it resolved promptly. So with this another value of democracy, service for the people is effectively implemented. Digitization is truly strengthening and enhancing the Indian democracy and widening its scope for betterment of common man. Digitization is the way to advance.