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DEMONETIZATION AND ITS EFFECTS

Dr. Charles Dias

On November 8, Indian Prime Minister Narendra Modi announced the surprise demonetization of the Rs500 and Rs1000 notes of Indian currency. This is not the first time that India has attempted to demonetize currency.   Prime Minister Moraji Desai in 1977 attempted  this.  Prime Minister Sri Narendra Modi has used his eloquence to justify demonetization and claims that ‘it’s a big blow to those who have black money  and right move to check fake currency’ .  He also claims that people at large have accepted his move which will have far-reaching results’.

 

 

Well, personally I approve the good intentions of the Prime Minister.  Black money and fake currency should be eradicated.  I have to say that demonetization was a bold step.

 

 

From 8th November 2016 onward people expected that Indian economy is entering a new phase.  But,  the sudden withdrawal of  1000 and 500 rupee notes have put common people of the country in a difficult situation.  The cash flow has suddenly decreased and people were in panic for collecting currency for their urgent payments.  The banks and  ATMs were flooded with people and the demands could not be met. Long queue are still there in front of banks and ATMS after 12 days.  Common people and villagers are in trouble; people who were planning family functions are hard-hit . This move has effectively  complicated the life of the common man. The rural poor who lack the infrastructure to set up deposit accounts and who currently hold all their money in cash form have been directly hit. It is reported that suicides have taken place because  of  difficulties in keeping promises to pay back money and to conduct marriages of daughters.

 

 

Economists have argued that this move has left the biggest chunk of black money untouched – the stacks that lie in undisclosed accounts in Swiss Banks.

 

New Delhi’s Chief Minister Arvind Kejriwal  has in fact accused the government of having strategically informed its friends and allies .

 

Uproar has staged in both the Houses of Parliament and matters become worse when Prime Minister kept away from the Houses.  NDA  allies Siv Sena has joined opposition parities in objecting demonetization  and  Akali Dal openly came out to differ from the Central Government’s move.

 

 

Now, there are a few questions to be answered. Whether the move of demonetization was properly discussed in the appropriate forum ? How the Government is going to answer the large deposits prior to November 2016? What happened to Modi’s promise of bringing black money from Swiss banks?

 

 

I fear demonetization is yet another frantic move of Sri Narendra Modi in his attempt to be the ‘sole hero’ of Indian politics and in this bargain he shows scant regard to people.  The pity is that there is no one in BJP to point out that ‘the king is naked’!.

 

Dr. Charles Dias, Former Member of Parliament (LS)

 

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