DEMONETIZATION OF 500 & 1000 RUPEE NOTES: Does this decision worth a penny or much more?

DEMONETIZATION OF 500 & 1000 RUPEE NOTES: Does this decision worth a penny or much more?

In recent move to reform Indian economy GOI demonetized 500 and 1000 rupee notes. Lot of discussion is going on in this regard, lot of debates are being performed by Indian media. In which questions are being raised by everyone those are, Does this action is really worth the pain taken by common man? And why should common man suffer this pain? Was it harsh decision taken in hurry without proper management? Can black money wiped out with this move?

First, India has circulated more than required cash in the market in past few decades. This enabled people to perform their transaction through cash, making it impossible to trace. Also excess cash pushed inflation and formed spiral relation with it. There was one more thing which gave sleepless nights to RBI, counterfeit notes. Now there were many measures to tackle this problem and demonetization was one of them which were mulled by economist for past few years.  Considering the vast and very complex economy, demonetization of currency wasn’t the piece of cake for any government. Because such moves often backfires if not successfully implemented. Here I am not supporting in political view but want place a different view in front of you.

Indian society has become very rigid and it has its own pace of change. Government just work as a catalyst to this change. So any big decision taken by government will just increase the pace of change and will not change the end result. And this result rest into the hands of the people of the country. So if we want big change we cannot have it without our engagement with it, even if it is disturbing your day to day life. It is your responsibility to participate in the change. Sometimes decision goes wrong even if it is taken for betterment of everybody. For such decisions even though liability rests with decision maker we should stand behind the decision maker, at least he tried. It is easy to criticize the decision by saying it is political stunt while resting in the home. If anything goes wrong the blame is on government. They would have given thousand shots before delivering it.

The most important effect of this decision is psychological impact on people. From onward they will hesitate to receive the money in paper form and the only alternative will remain precious commodities. Because now a days everything else is routed through computerized channel this will help in tracing the transaction. The effects of it will be following

·         High value transactions in the paper currency form might not be vanished but will be difficult to carry out.

·         Huge amount of paper currency was hidden in the basement; at least portion of it will come into circulation which will help ease the inflation.

·         Issue of bribe will be solved because bribe is usually handled in the currency format.

·         It will make difficult to circulate the forged high denomination notes in the market because it will be easily noticed and forging the lower denomination notes will not be economical.

·         At least portion of tax will be recovered.

·         Henceforth money in the circulation can be easily monitored.                               

There are many adverse effect of it, I know but we cannot even walk without friction. That doesn’t mean we should stop walking. If you want to mock the government it’s none of my business but you really care for the society then please just don’t jump to the conclusion with some bookish references. Because real life is far beyond the grasp of fairy tales.