Demonetization, I would like to describe it as a very bold and daring ever step. It is such a bold step, that even the own party members cannot digest. And, as any other opposition leaders, parties or individuals stating this step as a scam, or a foolish decision, I am against them. No party, no individual would take such a serious step putting their position at stake. This is such a bold decision, that his position would be at stake, would have to be ready to step down any time if it doesn’t workout, as there may be pressure internally, from opposition parties, from industrialists and businessmen community. So, considering all these, I understand there is enough planning done in order to face any such consequences. With just a single step, the NDA government has attempted to tackle all the major issues that are affecting the Indian economy i.e. A parallel economy, Counterfeit currency in circulation & Terror financing. This may not definitely curb cent percent corruption, but a part of it. May be considered as baby steps or the beginning of new era towards Clean India. For someone, who always say, What is this for? What do we get out of this? Why should we suffer? Why aren’t billionaires standing in queues? In simple words, In a layman language, money keeps growing, when spent or exchanged for some goods and services. Money should never sit idle at one place. You deposit money in the banks, do you think they just keep it in lockers and pay you the interests? The banks further rotate the money in different ways, through different kind of loans(Personal, Farmer, Education, Business, etc). So, with respect to the black money or unaccounted money, the people just keep it unmoved or in lockers or underground, or may be in the form of gold, etc, which doesn’t account in the economical growth. As the printing and the supply of currency happening and the more and more currency going unaccountable, there lies the economic slowdown, economic recession, rise in inflation, and many other economical imbalances. Just imagine, when all the unaccounted money comes into existence and rotation, there could be a rapid change in every economical aspect. And for god’s sake, have some patience, please don’t expect that change in a month or two. We, people keep shouting about the rise in fuel prices, rise in inflation etc, but when someone is trying to address those problems, why do we shout again? Demonetization declared and is still under the process of implementation, so let’s have little patience. A simple truth is, the old notes are still valid and you may deposit them in your bank accounts and are valid till 31st of this month. Due to the highest level of negative marketing done by many, people are in a notion that they are invalid, they are of no use, and could only be exchanged with the help of brokers or mediators on a commission basis. We literate people, should at least take responsibility and educate a few in and around you in very simple words. I have heard and seen people say “R.I.P old Rs.500 and Rs.1000 notes, but they are valid by depositing them in your bank accounts. So, it isn’t R.I.P. yet, they are still alive and are on Life Support System” The decision has been taken, and which cannot be rolled back, so why talk about that, let’s just accept it, take it forward on a positive note. We all know a basic truth that digital transactions could easily be accountable and useful for the economy, but we run behind the physical money. I hardly used the physical money after the big announcement. Every other store now has either of the digital payment modes. It’s a great transformation towards a digital economy. As, I see there are many, who talk about farmers, villagers, people in small towns facing problems with the cash crunch. Yes, I do accept it. But, when it comes to cities or in the hi-tech areas of the metropolitan cities, forget about slums in the cities, this shouldn’t be the case. But, there are people standing in queues in hi-tech zones. This shows the tendency of people towards the digital transactions. Accept the change & Be the change. So when someone asks, Why do we need to suffer ? I would like to say, please don’t suffer, find an alternate. And when someone asks, Why no billionaire stands in a queue ? Of course, the problem of a common man may get resolved by standing once or twice in the queue, But, what solves the problems of a billionaire. He/She just stays back home and finds the ways. Impact of Demonetization It is too early to comment on the impact of demonetization or effect of demonetization. This is still under implementation process. There are both positive and negative impact of demonetization. First let me talk about the negative impact of demonetization : Cash crunch : Yes, there is a huge cash crunch. As, the small denominations are accounted to only 14 to 15% of the total currency in the market, more and more small denominations would have been supplied. Assuming that the currency may not be supplied in a large number, due to the ideology of digitalizing the currency. Economic slowdown : The major industries like real estate, infra, gold etc have been affected and sales would come down and that impacts the growth of the economy. Many transactions halt, until the markets gets back to normalcy. Markets may see a temporary fall, and temporary recession. At least a year would be the span to retain the normalcy. There could be a long-term gain. Real Estate : As demonetization hits real estate industry very badly, people has now got no clarity on how to go ahead in terms of buying a land or a house. Government has to come up with some sort of awareness campaigns about how the future of real estate could be seen, whether any new laws comes in to picture, if customers has to wait or may go ahead and buy them? Corruption at different levels : This step proved that, given a chance, every individual is prone to corruption. Indian banking system is supposed to be one of the most stable, rigid and strongest across the globe. Our banking system is so strong that it could even face and withstand the global recession in 2008, but all that reputation is at stake now. This bold step lead to many banking frauds and illegal transactions across the country. Bankers, Currency chests and may be a few at RBI, played a major role in the frauds post-demonetization. Police, CBI and I-T raids are just seeing shocking and disturbing figures of new currency been supplied illegally. Also, poor people are prone to corruption. There are huge deposits in Jan dhan accounts, bank accounts of poor people, which shows even poor people are corrupted and are ready to save the corrupted. So, given a chance, at least 95% of people are prone to corruption. “There is a famous saying in Telugu, the one who gets caught doing a mistake is a thief, and the one who doesn’t get caught, doing the same mistake is a king”. We expect a very serious action with respect to banking frauds, as we common people are facing the trouble and can’t afford to see things happen this way. But, it is the responsibility of the government to take out all the culprits in order to gain the credibility, as it shouldn’t be very difficult to track the new currency as it is just a month old. The new digital Laws : A step towards a cashless economy is a great step, but government has to bring in more laws, that helps people understand about the safety in digital banking. It is the governments responsibility to make people aware about, how safe and good, the digital banking is. There are high charges now for digital transactions like at POS, Internet banking etc, which has to come down. Recalibration of ATM’s : Recalibrating ATM’s was not done at a great pace as it has to be done in such critical situations Death’s : Something has to be done with respect to the people who died due to unavailability of cash. Positive Impact of demonetization (Over a period) : Cashless & Digital economy : A better step towards Digital India. There are now several to being digital. There are several banks, several digital wallets and new payments banks entering the markets. Aadhar card linkage everywhere could also be a game changer. Interest rates : There should be a rise in banking interest rates. Inflation and GDP If not Poverty elimination, at least a difference in the poverty graph has to be seen over a period. Every individual who are now standing in the queues are to be shown the difference, which increases the credibility on such bold steps, and let them be prepared for such kind of decisions in future which could be taken in favor of common man. Terror financing could be one such factor which could have a great impact. Great step towards Counterfeit currency circulation cut down. Hope for Better Society, Clean India, Digital India…!!! 933 Views · 2 Upvotes Promoted by Walnut Money Manager Do you know how much you spent last month? Get Walnut app & know. Install Walnut to track expenses, manage bills, split bills with friends & more. Get started now! Get the app MORE ANSWERS BELOW. 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What are your views on demonetisation and its effects? 4,020 Views What is demonetisation of money? 24,763 Views OTHER ANSWERS Dev Sinha Dev Sinha, Entrepreneur. Dreamer. Answered Dec 19, 2016 In last few days there has been quite a lot of debate on demonetization- one of the biggest criticisms being that the implementation has been quite poor and has caused a lot of inconvenience to the common man. While it is hard to say what exactly transpired in the corridors of power in the run up to demonitization, I’m sure certain tradeoffs had to be made between keeping the secrecy of the mission vs. consulting all stakeholders and creating a full proof implementation plan. And some of this shows as we see the execution challenges in the last few weeks. Having said that, I also have another contrarian point of view. Why should all the burden lie on the government. Shouldn’t all of us as citizens have a role to play? To educate others on digital payments, to take our household help to bank and open their accounts, to convince our parents/ relatives to have all transactions in ‘white’ and pay taxes in full. The performance by citizens of India has been better than average in terms of maintaining peace and order, respecting the new rules etc. But I’m afraid that may not be sufficient. We, especially the educated lot, need to do a lot more to make sure the objective of a cashless society gets realised. Here is a small way in which you can do so - enabling a literacy mission on digital payments (Paytm Seekho ). Imagine when every sabjiwallah, doodhwalla can use digital payments, and people can no longer use ‘cash’ transactions as a way of massive tax evasion, what all benefits can accrue to the country. Imagine the development spending that the government can do with all the additional tax collections - spending that ensures that we are in line with any other developed country in the world.