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Works knows that both terrorism and Naxalism

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Works Cited
http://www.sify.com/news/10-long-term-goals-of-demonetization-news-columns-qlykOnahbbgge.html
https://www.quora.com/What-is-demonization-and-its-effect
https://www.investopedia.com/terms/d/demonetization.asp

Demonitisation and its effect on indian economy from Arijeet Dutta

https://list.ly/list/1KKz-8-negative-effects-of-demonetization-in-india

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Demonetization
was a very bold step taken by the Prime Minister of India to wash out shadow
economy and to stop fund flows to terrorism. According to facts, 90% of the money in circulation was brought back, thus distinguishing black money from the Indian
economy. Demonetization has powered cashless transactions thus brightening up
future for the cashless economy. But the
GDP growth went down as an effect of demonetization. Also, most of the sectors
like agriculture, small scale and medium scale industries were badly hit by
demonetization further adding to the short-term inconveniences caused during
the days of demonetization. In a nutshell, demonetization has contributed to
the economy in different ways. The long-run advantages are yet to be seen.

Suppressing
the use of black money in political campaigns a lot of black money was used in
by political parties and leaders for elections and campaigns. Suppressing this
flow of black money was always a failure in the past but the overnight removal of notes from the market was
a huge hit with this kind of acts. And this has also affected the Naxalism and
terrorism everyone knows that both
terrorism and Naxalism run on black money
and counterfeits. The demonstration has cut the flow of money to terrorism
which has felt them weak and down almost ready to be wiped.

The
mindset of people has changed before
people used to think the black market was some kind of figure which can’t be
touched by the government but with sudden removal of currency from the economy
people have changed their opinion and also people of India are felt on their
toes as any day any currency from the economy can be removed with any notice.
This was greatly affected the black money markets and counterfeits. Slowly the
black money in the economy will find its way into
the main economy from where the economy will get its boost. This will result in
a stronger economy and the value of India currency may go up in the near future
as most of the black money will be turned in to white money

The
cashless economy is no longer a dream for
India. The Indian government plans on bringing a complete stop to the liquid cash and all citizen to do an online
transaction where they can to monitor.
The demonetization has every citizen of India to have a bank account and make them to all these transactions online where this transition can be watched by the
government and tax on the right money and making all the black money in India
turn to white money and bringing all of that into
the main economy.

The
long-term goals of demonetization in
India are the obvious one is the black money market in India for which Indian
government can’t tax upon. The exact figure of black money in the market but it is estimated to be about tens of
thousands of course of the Indian rupee.
The movement defectively will help in bringing some to the main economy. This
demonetization will force people to have a bank account in the near future
everyone in India will have a bank account and the number of increased bank
accounts and deposits after demonetization is phenomenal and also every citizen
will be monitored online using their online banking system which will almost
kill the black money market.

Other
indirect impacts include Kashmir moving
to an anomalous position, usage or in fact overdosed usage of apps, a huge fall
in the stocks of gold rates and simplification of huge tax policies. Whilst
banking and e-commerce have boomed majorly.

No
doubt demonetization has had a huge blow or impact on the country’s media
influence. The thrust of demonetization was to prevent a parallel economy. In
fact and in the most ironical way, this very policy has given birth to a new
society especially in areas like outskirts of Bengaluru. As Indians struggle to
come on par with this newly introduced
policy, demonetization has seemed to spread pockets of hardship despite vain
attempts and crucial needs like tolls, chemists and hospitals. One thing is for
sure demonetization is definitely hampering the present scenario and current
situation and therefore in the near situation and it is expected to have long-term effects on the country’s exponential
growth.

Demonetization
has a huge effect on the country’s GDP. Let’s put this mathematically, simpler
words being said, the speed or velocity of money is the relative ratio between
GDP and money in circulation. Also, it is
claimed that it has reduced inflation. Of course,
large deposits are going to be in reference to tax scrutiny. Also due to the
demonetization policy Indian markets had to face a huge loss in the Asian
markets. Indian economy has always fallen prey to black money and hardcore corruption. There were crores and tons
of black money flowing to and fro and curbing of black money at its peak.

Another
issue is that consumption by this population will be unbalanced. Also, a
subsequent huge loss of momentum is another blowing impact. By this policy, not
only has it risked a common man’s life, it has also risked the country as a
whole from being the rapid or the fast-growing
economy. This anyway would lead to reduced consumption, incomes and investment.
Another impact is that interests will be imposed on deposits. Also, there is a huge impact and reduction of black money. Another impact I personally
feel is important is there is a huge counterfeit in the cash flow or respective
currency. One should remember that this could dampen the country’s economy in
the short term. But the benefits are immeasurable and transparency is more.
Basically reduced the amount of black
money and has long-term benefits.

Another
subsequent loss would be of the loss of welfare for the population that once
upon a time used this replaced currency.
If we consider the country’s economy to be a whole pyramid, the population is
known to constitute the base of the pyramid and if this base is disrupted then,
the consequences are understood. The main issue to underline is that stringency
in cash will force the common man to reduce incomes for the blue collared
beings who earn minimal wages.

Demonetization
is all set to mark history and is definitely going to be the economic events
that will scrape the timeline of Indian history. But what is most likely to happen in the near future is
that the value of 2000 will reduce since its utility will subsequently reduce.
It has a short-term effect that is
‘liquidity crunch’. If we deeply research the value of the 500 currency note,
constituted nearly forty-nine percent of
the total country’s economy. This indicated that cash crunch will be
predominant in our country’s economy for the next few months.

All
though all this was widely happening around the country, people still claim to
have found black money. But the banking mafia has greatly benefitted from the
transactions. We ought to keep in mind that this policy: demonetization is a
‘one time-act’. We can’t expect a great effect or impact just from this. But
this is of great help to sideline the big massive losses and it helps in
subsequently reducing daylight robbery.

Personally, I feel demonetization is not a mode of corruption, not a
form of like a scam, it’s just a step or in fact a major step to curb black
money. And this step is purely taken in collaboration with RBI. Another
impressive stepping stone to this policy is there absolutely zero trace of
poverty, a much-awaited result for the
Indian government.

Although
this is highly appreciated, the withdrawal of this once upon a time used
currency is a major reason for a wide disruption of the financial activities. It’s for sure that the sudden
enforcement of this policy has got the entire nation shaking in utmost havoc
and chaos in the banking sector and subsequently led to the circulation of
currency which is printed and has caused a major standstill in the Indian
subcontinent.

Although
there are many demerits and drawbacks, this policy has been widely accepted and
appreciated and it was widely agreed upon to completely demonetize 500 and
1000’s notes.

If
we think about demonetization in favours
of the ruling house or in short the government, it has effectively enabled the
government to profusely track down black money. Because of this newly
implemented scheme, the central
government is able to rightly get back
its tax returns and incomes.

The
intention of the government is to, stop the flow of cash from illegal and
explicit cash. Everyone all of a sudden becomes accountable and responsible for
all the money they hold in possession. Moreover,
another additional effective decision taken was it encourages everyone to open
their own bank accounts and deposit their possession.

What
exactly is demonetization? Making this absolutely clear, it is the absolute and
proper enacting of this particular policy with specific cash or currency that
will replace the current or existing currency. As we all know the currency that
was replaced is 500 and 1000 Indian rupees and it is expected to fill legal and
specific objectives. We all should understand the fact that the Indian
government has enforced this policy in order to resist corruption and abhor the
fear of limiting black money and increased stakes on products.

It
was on the 8th of November 2016, hearts were tightened and the
entire Indian nation was glued to their respective media sources to know more
about the demonetization that all of a sudden became a part of the on-going
financial reforms. At first, its merits and demerits were not taken into
consideration although not completely we can be ignorant of the fact that it
has its own impacts and prospects.

Demonetization
in India: Impacts and Prospects

16th
January 2018

MSSM600

Dr. Rajneesh Mishra

Tomcy
George Thomas

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