Demonetization is a pain with no benefits

As Narendra modi's boldest move failed to nail out corruption and black money in any manner, now the move is seeming as an intention to help elite business men of the nation who give crores as party fund to BJP.

Economists like Amartya sen, RBI ex governor YV Reddy, Arun Kumar etc,right from the first day criticized the move. Now demonetization failed in all aspects

1. corruption : we saw many bribery cases with new notes. The sources of corruption are not effected.

2. black money : we saw almost all black money is converted white. Black money in the form of gold, assets, foreign investment, crypto currency emerged.

3. terror financing : we saw some terrorists in kashmir have new notes with them days after demonetisation.

4. fake currency : After all american dollar had highest fake currency, fake currency of new notes will emerge soon as the sources of fake currency are not caught. RBI too didn't have any data.

5. people lost jobs ; In medium and small sector 35% of people lost jobs ,and revenue is down by atleast 50%. small compsanies are unable to recover even now as only 24000 per week is now enough for a small company to survive.1 2 3 4

6. labour effected : All cash dependent labour lost jobs for atleast 2 months.

7. Hawala transctions: They lost their business only for a month and started doing business with new currency. You already saw crores of rupees with many people.

8. Banks lost reputation : bankers are brought into corruption

9. RBI failure: RBI failed to address the concerns and troubled common man only and no big politician is caught in the process.

10. Rupee lost reputation: along with India, Indian rupee is used highly in Nepal and Bhutan. Now Nepal altogether banned rupee, Rupee transactions stopped in Bhutan also. Now chinese yuan is emerging as secondary currency in Nepal, although it cannot completely replace rupee it hugely effects Indian prospects.

11. tourism sector: Both domestic and international tourism fell to zero.

12. deaths: many people died not just for lack of money but for losing jobs, self-employment losses, lack of daily wages.,,

13. Growth rate effected: India's GDP growth rate fell by atleast one percent than the projected

14. FDI outflow: All the good news of growing FDI in last few years is lost

15. GST delayed: GST is apparently delayed due to this

16. Agriculture: farmers are hugely hit as they are unable to sow crops in time as their money is struck mostly in co-operative banks

The list of disadvantages is not ending and I did not find any advantage of the move. They say it helped rise of cashless economy. Is the economy cash less now? We already saw the disadvantages of existing cashless economy like paytm- SBI- HDFC dispute, freecharge dispute, hanging of apps like paytm, BHIM,others,. India lacks infrastructure for cashless economy now, India is already moving cashless and preple are using paytm, netbanking from years on this move only made those applications hang. After an year when small banks, payments banks and Postal payment bank becomes operational we can see rise in cashless economy. Demonetization bringing cashless economy is a myth.

Narendra Modi with the help of newspapers like Eenadu which became his pamphlet in recent times bluffed you. The reality is different. Demonetization is a move to help BigBazaar, Reliance Jio, Paytm etc., who generally give thousands of crores of rupees to BJP as election funding.

Boldest move ever: But large Black money holders are not affected

          Indian government’s decision to demonetize 500 and 1000 rupees notes, the two highest valued papers on land is the boldest move ever a government taken to curb the menace of corruption. Black money accounts for 20 percent of the GDP of nation which is 133.5 Lakh crore according to Ambit Capital Research. Many other sources say that black money is much more than that.

Large black money holders are saved 

          Most big players who have i)acquired assets with the black money, ii)converted into white, iii)acquired assets overseas, iv) Invested back in India as FDI in dollars through tax heavens like Mauritius v) Valuable metals like gold and silver will not be affected by this move. So Politicians and Business men have insulated themselves from this shock. They have converted their black money into dollars. Small proportion of their black money (might be less than 5 percent) which is in cash may be affected which is much less than the 45 percent tax they need to pay. It is blow to only those players who keep black money with them without investing anywhere. 

           It is a surgical strike on Hawala operators who generally transfer money from overseas and hold large big notes with them. Collapse of hawala transactions will be big boost to GDP of the nation and banking sector. 
          Government employees pay tax for the amount then earn legally. It is only those corrupt officers who have not invested their money are drowned. 
          Small and medium business units who runs economy of unaccounted transactions are the worst affected. These people avoid paying tax even though their incomes fall much in the tax net. Unorganized sector employees who are paid their salaries in cash will also face problems in exchanging the currency they had. 
          Non bank account holders will be affected for sure but their proportion is reduced with Jandhan. Especially in north eastern and hilly terrain areas where banking has not penetrated will be affected 
          As a whole this policy is a target on small and medium black money holders only. Even some of them also converted black money into assets to the possible extent. 

Good future prospects

          Most Black money is an outcome of corruption, this is a surgical strike against corrupt. Decrease in corruption levels will boost the nation in all terms. 
         The proportion of small and medium black money holders is very high in the nation. They are the future large black money holders. So curbing them is a wisest move as a large potential of future black money is stalled. 
         Net amount of black economy will be minimized and it will give government to implement its schemes and activities for the benefit of the people. 
         Encouragement of Virtual money(e- banking, credit and debit card) increases transparency in the nation.
         As all the people will bring their money to banks, transactions of money increases and in turn raise GDP of nation. 

Immediate state of economy

        As the nation highly runs on unorganized sector the immediate condition of economy will be in a degrading. A parallel economy which is running on black money collapses to a major extent and leads to unemployment. Small and medium business units which sustains on tax evasion will crumble to large chain and multi-national companies. Small units do not have professional management and skill workers like MNCs and chain linked companies. This is a great chance for Ambanis, Adanis, Birlas, and other business man to expand their empire which may in turn result in collapse of small industry. Accountability of economy will surely increase but diversity in economy may vanish.India as a country should not become a puppet of a few businessmen rather it needs to give space for maximum businessmen for the future growth of the nation. 

         As banks will not be open for 2 days, the economy of nation will be crippled these two days. People face extreme situation these two days. Even after that people have to get ready for large queues which they use to buy first day movie tickets of star hero and much forgotten now with introduction of digital cinema. As Indian economy is cash run economy the 100 rupee notes which are in circulation will not be enough for transactions. If transactions decrease economy decreases. It takes atleast a week in urban and a month in rural areas to pump enough currency to rejuvenate the economy. The readiness of RBI with new notes is an important factor in determining the time by which enough currency is back with the people. Excess black money holders will soon start selling their notes for lesser value. A 500 rupee note may be sold for 400 now but its value falls to zero as the deadline of December 30 comes. Digital banking units like Paytm, freecharge, DBS, are the immediate beneficiaries in technology penetrated areas. 

Welcome move

        Any step which helps the growth of the nation is laudable and welcome. It will be a bigger achievement if government works faster to pump enough cash and bring back the economy in the quickest possible manner. The liberalization of Indian economy in 1991 has surely helped the nation, but in its immediate following many Indians lost their jobs and many local companies collapsed unable to bear the international competition. Now government must ensure that small entrepreneur do not lose out to big entrepreneurs like Adanis, Ambanis, Birlas,.