Impact of Demonetization on Indian Economy After 1 Year !
Almost a year ago in November 2k16, PM Narendra Modi shook the nation whilst announcing about the ‘Demonetization’ in a live speech. Talking about the black money in the country and giving sleepless nights to all those money hoarders across the country. Demonetization is one of the single most controversial and a groundbreaking decision was ever taken by a Prime Minister in the Indian history and it has affected many sectors. The consequences of demonetization were seen in the real estate sector, healthcare industry, wedding industry and the travel industry majorly. All of these felt the pinch of the sudden move to 500 and 1000 notes from circulation, largely the effects of demonetization on these sectors proved to be negative.
Talking about the big bang move i.e. ‘Demonetization’ Modi clearly announced that people can freely deposit their old notes till 30th December 2016, without any limit. Soon, there came a new set of rules than another and then again followed by some other rules, perhaps many lost tracks came this way. On November 19, the RBI announced that all the deposits of demonetized Rs 500 and Rs 1,000 notes in excess of Rs 5,000 will be allowed only once till December 30 – that too after strict scrutiny and all this became so usual. We have a list of the ever-changing rules:
- Cash exchange
- Cash withdrawal
- Use of old notes
- Exceptions for farmers
- Exceptions for weddings
Every second person was losing their minds when the much awaited fully controversial demonetization came into existence. People have been rushing to the ATMs and banks resulting in long queues which began from the early morning’s hours. In the midst of all this chaos, many people used social media to talk about the problems they faced, to discuss and debate about it.
Well, demonetization wasn’t an easy take neither for the government nor for the people of this country. It is good to see the Prime Minister who works with such innovative ideas but at the same time, the government failed to execute it in a better way. The slowdown which took place in the economic activities of the Indian industry happened because of demonetization causing lower profits and in turn, lowers taxes for the government also, there was a potential crash in real estate prices. The good and bad of the execution are:
- Demonetization came out to be a good attempt in order to make changes but people are still chugging around. Across the country banks are slow, but still doing their bit with full attention. No mass hunger or any type of calamity, thankfully.
- No doubt, Government is taking steps to change the situation. The changes done in limits helps and banks are busy devising ways so that the crowds can be managed.
- Wholly people in India are taking it well.
- Someone has not planned the logistics well.
- Citizens do not have to take so much pain. Inconvenience is one thing, suffering quite another. To say bear it in the name of patriotism is not listening to the issue – the execution is not efficient.
Demonetization could be said as worthy but it has hurt every alcove and niche of the economy. The industrial output smashed, services growth has slowed down and eventually economic growth slacked up. Albeit, RBI believes that despite all the harmful effects of demonetization on the Indian economy are transient the government still needs to ensure that its benefits are not.