How demonetization is affecting common people more than black money holders?

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PARTH said:   7 years ago
Good morning all. Today I would like to speak about the one of the most important thing happening in India; Demonetization. In this speech, I would like to draw your attention to why it's been done? Who did it? What's the impact of it? I am trying my best to make this speech a neutral one. I am just a high school student, I am not affiliated with any political party. Let' start with what actually demonetization is.

Introduction to Demonetization in India and Its Status.

So, what the demonetization? As per "Investopedia", a demonetization is an act of removing the legal status of currency as "Legal Tender". Means old notes or even coins must be retired and replaced with new ones or completely new currency can be introduced like Rs. 2000 note which was not available earlier.

On 8th November, PM Modi's announcement was the breaking news across India. Rs. 500 and Rs. 1000 notes (currency) are made illegal from a stroke of midnight. One might think, why it's been done? Indian government's goal was to remove all counterfeit (fake) currency from the market which is used in tax evasion, corruption and even in funding terrorist activities. These two currency notes are the most used currency in the Indian market, it had 86% share in the market. This was a very big and risky decision and as some aptly said it is a "Masterstroke". Some even say it is a "Surgical Attack" on black money. In simple words, old Rs 500 and Rs. 1000 notes are worthless now, they are just a piece of paper.

The opposite of demonetization is remonetisation, which means restoring the demonetized currency as legal tender. And a lot of political parties from the opposition are fighting for it.

Impact of demonetization within India and foreign Relations.

Demonetization has a big impact on Indian market and citizens like you and me. People flocked the banks to changed their currency and stood in long lines in front of bank and ATMs for hours to draw their money. Surely, we have problems in but we also need to understand the importance of it. Just imagine if it was told a month ago, then all black money launderers could have managed their money in this or that form. That's why it has to be a sudden and surprise act.

India is not the only country which used demonetization to deal with corruption, inflation or tax evasion. In Europe, when they introduced the Euro as European Union currency old currency was demonetized. In 2015, Zimbabwe demonetized their currency to eradicate their hyperinflation.

Demonetization can also be used to promote the "Cashless Economy". As PM Modi aptly said, we might not be a completely cashless society soon but at least we can be "Less Cash Economy". Under cashless economy, people prefer to pay for goods and services in digital format than the cash. Tough we Indians love to handle the cash, such event was necessary to change the mindset of people who loves cash.

On another side, we can see a positive reaction from all over the world. Other countries who wants to invest in India thinks that Indian government trying to solve Indian red tape and corruption. It will draw more foreign investment in the country which will help Indian government to build a better India.
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Sayan said:   7 years ago
First, we should understand what is black money. Black money is a money which is illegally obtained or not declared for tax purpose.

We all know that Govt of India has taken a step called demonetization to retrieve the black money. But the question arises is it an effective and practical way to address black money?My answer is no.

Demonetization has been proved to be ineffective as 99% of banned notes have returned to RBI. And it was predictable.

First of all, only 5 to 6% of the total black money is in the form of hard cash. So to target that minimum amount of black money Govt of India banned all 500 and 1000 rs. Note. These notes are the back bone of Indian economy.

We saw over 100 of common people died in the long queue waiting for deposit 500 and 1000 rs notes to the bank. But we did not see any business man waiting in the queue. Many people lost their jobs due to demonetization. Govt of India also announced every citizen would have 15 lakhs in their bank account but I don't know if anyone got 15 lakhs in their account or not. They also said terrorism would be decreased but unfortunately every day in the newspaper we saw that many Indian soldiers are being killed by the terrorist attack. Before new 2000 rs. Note coming to the market fake new 2000 rs note is found from terrorists on the Kashmir border. So it is enough to prove that demonetization has been failed.

Now the question arises why Govt of India takes a drastic step like demonetization, is it only for black money or there is also another reason other than retrieving the black money.

We all know that total 63 business men are not returning their loans (total amount of 7016 crores rs where Vijay Mallya 's personal loan amount is 1201 crores rs. ) to the SBI bank. Now SBI bank has lost hope to get return their loans and has given loan waiver. But farmers don't get loan waiver and are forced to commit suicide. After demonetization SBI bank has also announced to deduct your money if the transaction exceeds a certain number. The interest rate has decreased from 4% to 3. 5% if you don't have at least 1 crore rs in your savings account. But those who have 1 crore in their account, at least they can not be common people. You also have to keep a minimum amount of money otherwise you have to pay fine. It means that common people can not use their own money how they want to. In this way, SBI bank has earned 235 crores rs as fine from common people this year.

I don't know whether there is a link between not paying loans of big business men to the bank and to make up the deficiency of that money and to save the bank from bankrupt collecting all the money (500 rs and 1000 rs note) in the name of demonetization and putting burdens (in the name of fines) on common people from the bank. Govt of India also said that they have a profit of rs 16000 crores but the interesting fact is they have to spend rs 21000 crores to make new currency. So does it make any sense?

If Govt of India really wants to curb black money then they should address the black market from where black money is coming. Otherwise, there is no real solution of corruption.
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Prajwal Kanase said:   6 years ago
First of all, we must know what is demonetization. What was announced by our Prime minister? What happened to our economy on 8th November, 2016 and months after that? So, demonetization means replacement of notes which are currently in working condition in economy. Our Finance Ministry announced that 500 & 1000 notes are banned and we have to replace them by 2000 & new 500 rs notes.

So, this is a big decision which requires lot of preparation. In Indian currency these notes' amount was more than 80% and in India most of the business is done in cash mode. It was disaster for the common people as they have to stand in long queue for hrs to replace old notes.

Now, I'm going to mention 2 main problems faced by people. 1. After standing in hrs, if I get 2000 rs notes and I went to buy stuff of my daily need, then I didn't getting any change. Because it was not available. 10, 20, 50, 100 rs notes were not available in that much amount. So, there is lack of preparation, if you're banning 500 and 1000 notes then you have to increase 10, 20, 50, 100 rs notes in the flow much before implementation of your plan.

2. Another problem is with ATMs, if government making new notes of 2000&500, then size of those notes must be of the same size of old notes. But, size was different and ATMs also needed replacements, which took work of over 50000 engineers for it and much more time and money. So, people at the same time were angry at the government and also appreciated government as they took step to remove the black money and corruption.

Government was saying this step is a milestone in cleansing of our economy, destroying of black money. But, real truth is black money was not hidden in cash only, it was laundered in many assets like lands, jewellery, foreign firms and it always gets turned in white some way. So, as government was expecting, there was not any type impact on black money, Neither big names, neither big black money.

RBI also stated that, approximately all old notes are got converted in new notes. This decision was dangerous for life of business which mainly depends on cash mainly small businesses. There growth and revenues decreased very severely.

So, this was a step without any preparation and harmed the middleclass people to much rather than black money holders. But, they endured the pain and appreciated government for this decision. This step was good, but taken without much thinking and planning. So, we can hope our respected government will take good decisions for good future of our country.
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Niza said:   7 years ago
This is the best topic to be discussed. On 8th of November, Indian government banned currency notes worth rupees 500 and 1000 which constituted 86 percent of the entire currency. Almost all people faced several difficulties and government decision was criticized all around. People demanded why there was no prior information regarding currency bans.

The basic aim of government was to control counterfeit notes, stop hoarding of black money, stop terrorism and to include unaccounted money in economy. But this step of government definitely failed to satisfy people, especially the middle class common people. People faced difficulties, many also died to wait in unending atm and bank queues waiting to deposit or collect money. Here also those people who boarded black money were the ultimate winners. They somehow managed to convert their black money into white. There were reports of various bank managers who were indulged in these unlawful activities and they took large interest rates on it.

We can't deny that it would have been the best decision ever for our country unless it had been enforced with proper planning. As government knew that it is going to implement demonstration, it would have kept enough reserves of new notes in all banks.

One main point was that the government was also not consistent with its decision. One day there was a rule that we can't withdraw more than two thousand, the next day it became three thousand and then again the next day it reduced to twenty-five hundred. Total forty-five times sometimes government or sometimes RBI kept changing their policies which created inconveniences among people.

Those people who had to marry their children were allowed to withdraw only 2. 5 lakhs. This was definitely not a nice decision as in today's economy where everything is on their sky touching price no one can even imagine of marrying his or her son or daughter with such a little amount. Farmers also faced difficulties. They were unable to fetch the required amount for their harvest for what they had expected. As a result, many of them had to dump their harvest because they had not enough money to bear the transportation charges.

Thus we can say that it was not an economic decision of government to ban notes without having proper reserves and there are also chances that our GDP may fall as a result of it and ultimately the sufferers are the common people.
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Neha singh said:   7 years ago
Demonetization is one of the big leap taken by the PM Narendra Modi on 8 november 2016 to deal with black money, terror funding, fake currency which is already in circulation and many more corrupted things.

NO, I disagree that demonetization is affecting common people more than black money holder because this move taken by the government to usher in bright future of India.

Bank and financial institutions in India were recently suffering from severe loans and non-performing assets. This bold move make the bank cash rich. Bank are today in very good conditions and have capable to finance big projects due to its increase in liquidity. Suddenly ban of 500 and 1000 rupee note created problem in front of citizens because they have to lined up in front of banks from day to night to exchange their old currency and even banks were faced problems due to lack of 2000 and 500 new notes. But we can see that the situation is stagnant now.

Now, bank have enough new currency. Demonetization effects large part of Indian economy, Indian citizen in some good and bad ways but no doubt this step was one of the bold move to back stab the corruption, terror funding etc.

Yes, one of the best thing as PM modi also said this is the only move which is supported by all the Indians no matter which caste, which religion they belong. And also demonetization is the move which grab appraisal across the country. Different country Pm's appraised PM Mr. Narendra Modi for this bold step. It will also ease up the tax -GDP ratio of india, thereby helping to improve India's credit rating in international economy.

As per the report, only 3-4% of citizens pay their direct taxes which make government collect more revenue from indirect taxes. If tax compliance is raised to 90%, it will not account for the wealth created but shall also increase the tax revenue of the government. It also effect the dowry system of India in large extent.

It is also a sure step towards the digital India as 86% of economy driven out of cash and yes digitalisation will be prove very beneficial for India as it will decrease the money related crime.

As being the Indian citizen it is our onus to support government for their right move for the betterment of Indian economy by keeping aside of our personal issue.
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Nennissa NB said:   7 years ago
Demonetization is a good step taken by the Government and we all support this. But the common people who are not involved in black marketing strategy, although they work under the big companies that are involved in it are facing trouble. Why (?) Because they are hard working. They work day and night for themselves and their love ones. There are many working-parents who work the day hours in office and night at home taking care of the family and looking after the children. Most of them like common- people-thinking dreamed of having a beautiful and spontaneous life by finishing up all the works and spend time with the family. But the Demonetization Act came out like a bullet from the gun (House of Assembly) many people shattered by this news. Those rich people they can easily get their money changed by just one call. But these common people who work for the best of the big people have to suffer in the long run lime said by Economist Keynes. Recent news came out by 2017-18 our Indian Gdp will rise to 7.5%and for that these common people will have to grab their throat out and rush.

Example can be given to the students who live in the hostel; when they don't have money to pay their hostel fees or any educational works they have to wait in the long tail of ATM. Moreover, some of them have a particular timetable set up for them to remain outside and come back. In that case, most of them unluckily come back as having exhausted without any money. Hence coincidentally they have to borrow money as a rent from their friends and in the mean time when they are unable to pay they do suicide. Corruption will be removed as they say. But hey it won't end the corruption. Corruption is everywhere all around the world. Another example : the common people like becoming mad for not having money and beating wife and children Vice -versa. In India, 28% people are still in poverty. The Devoloping country like India will suffer and still be suffering. And to Solve this matter, patience is a must. It will be solved in the near future only if the COMMON PEOPLE AND RICH SUPPORT ONE ANOTHER. C'mon people in a country like India full of diversity can at least do that. Afterall Democracy is our policy. One Nation Having infinite culture but still the We Are The ONE.
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Ankita Roy said:   7 years ago
November 8, 2016 was a nightmare to all of us after getting the information from the news channels of banning the 500 & 1000 notes.

It was a great step taken towards the anti-corruption to remove the black money from the country. But the impact on the 3 classes of society was different from each other. The 3 classes of society as defined mostly are low, middle & high. Talking about low-class society (people below poverty line) would not have much cash in 500 & 100 notes. But the little they had, it wouldn't be exchanged at banks as most of them do not have bank accounts. The next class of society is middle class. Keeping the huge amount of money with ourselves not necessarily means a black money. It could be due to many occasions which need it like marriage, house construction etc. During the demonetization period, these are the people who suffered. As a bank had defined amount limit on the exchange of money. The third category society the upper-middle-class & high-status society, who are suspected to have black money. The question arises here "Would they keep hard cash or will it be in some other form. This class not only consist of the businessman but all the politicians and other high authority holders. It's quite obvious that the decision of demonetization was not taken alone by the prime minister of India. It could be with a group of members which include politician and other bodies like a bank. They were aware of the step before it was applicable. Now, this could let us think that precaution measure have been taken by them for not being black money holder. It is important to focus on the denomination it's the ban of 500 & 1000. This is done to avoid the large amount transaction in cash, a step to avoid black money. But a new denomination of 2000 is introduced the very next week. It's quite contradictory the way steps are taken and the implementation of it.

However, it could be implemented in a better way by setting a limit on "earning & property and to track them down by income tax raid & not disturbing the whole nation. As a citizen, it's our duty to support & encourage such steps which could benefit our nation & the people
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Krishna kanth said:   4 years ago
According to me, demonetization is changed the corruption era. It is affecting common people more than black money holders but good thing is that it affects on corruption. We saw that in demonetization the goverment collect lots of money from black money holders also its increase GDP of our country. But common people faced lots of trouble in three months. They are standing in a queue for a day for 2000 or 4000 and ATM was empty. Also, bank employees help celebrities and politicians for withdrawing money from the backside. My view is demonetization is a good step but its affecting common people very much. Demonetization is a good step taken by the government it is definitely helpful to India to become developed country from developing the country and it is very helpful to decrease corruption in India. But for the demonetization common people's face lot of problems than the black money holders because for withdrawing money they wait a lot of time at ATM centres. It will apply for every five years it will definitely useful to decreasing corruption. Demonetization is affecting to the common people but they will get benefit from it in the future. Someone said that instead of immediate disclosed this information they should inform the people for fixing the date for demonetization if they do so, again it helps to black money holders before demonetizing they had exchanged the money from 500 and 1000 to 100 and 50 notes. Modi had taken a good decision of immediate action on demonetization. Of course, it had affected on common people not only in this matter. There are several matters are there which can affect to common people. If anyone made the survey immediate decision on demonetization they will get 80% to 90% good result because our country people know what is right and wrong. Most of the people knew that demonetization will help to the middle class and low class and it should affect on middle and lower class along with these things, they knew they will get benefits from this in future.
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Anna said:   7 years ago
Hello everyone,

Demonetization is a very good step towards the development of our country, fake currency and corruption that was taken by respected PM Narendra Modi advised by Anil Bakoli. We always complain that no action is taken against corruption and when it is taken we start to blame the government. This was an abrupt decision and it should be, so that corrupt people can't convert their black money into white, so people also have to face problems due to this abrupt change. According to me demonetization has two faces one is good and one is bad. Good face is that it returned back a hundred crores of black money that will be used in the development of the country. Government Also allowed old currency in hospitals and some government institutions where someone's life is more important than its decision.

Bad face is that the proper arrangement of the new currency was not there that's why common men have to stand in a long queue of banks and ATMs. I never saw any rich person or celebrity in this queue because they have the approach to convert their black money. Many have to suicide because they could not arrange the money for their children's marriage and farms. Corrupt people are taking a bribe in gold and new currency form. All the black money is not in the form of cash, it is in jewellery, property form and stored in Swiss banks. Only common men much affected in this surgical action.

I know the condition will be same after some time, bribes will be taken, the neighbour country will print fake currency and corruption will be continued. But we know abolition of corruption from the root is very difficult but to some extent, it affected by this decision and crores of black money captured in it that will be used for the country.

Thank you.
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Kavya said:   7 years ago
Good afternoon everyone.

At the starting stage, it is true. In my opinion, it was a gd plan taken by our respectable pm Modi JI. Up to some extent, I will accept this. By demonetisation poor people suffered a lot. Central didn't intimate at-least once. Without information, at once they changed the money. By this black money holders, they didn't suffer at all. At that time people visited so many ATMs but there is no money at all. If the government is implementing any thing, first of all they have to intimate once to a people. At that time so many common people marriages were cancelled due to demonetisation. But the political people nd some other great people marriages hasn't been cancelled. For that people one right nd for common people another right. This is the worst position in India black money holders in another way they made their money into white. Common people stood in the line for days but the celebrities and politicians at least they didn't stand at once for a money. Mainly due to demonetization shopkeepers and small vendors, farmers they suffered a lot. In Tamil Nadu one politician he distributed his money for a people for each candidate he gave 3 to 4 lakhs due to black and in some other states, they even threw the money bags in the garbage and some people burnt the money also. Corruption is more in our country. Our country placed 1 st position in corruption. For small signature from the officials they corrupt the money first later they do the work that to they corrupt the money from poor people only.

After demonitising, In one week only again they make 2000 rupees as a fake note. See how the Indians are. They are using their intelligence in unwanted things. They are not using for wanted things.
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