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Demonetization of 100 and 500 rupees notes in India.

Updated on December 16, 2016

Before Prime minister Modi was elected and Bhartiya janata party came into power in 2014 the country was in turmoil. Scams worth billions of dollars, corruption, inefficiency of the government and a general disgust for the political class was making people of India opt for change. Adding fuel to the fire was the agitation and movement by Anna Hazare a respected social worker. People of India needed a leader to restore faith and credibility in the ruling class. They saw hope in Narendra Modi who was then the chief minister of Gujarat, a state in India.

Narendra Modi made the people of India believe in "achche din"(good days) that were to come if his party was elected with him being the prime minister. He promised the people that he would get rid of corruption, create employment, increase the standard of living of all Indians and make India a superpower in years to come. Maybe people didn't have too many options or they just were swayed away by the euphoria of the "Modi wave" that Modi came to power with a huge majority and now it was time to deliver.

Prime minister took many decisions for a better India of which the most recent and significant was the demonetization of 1000 and 500 rupees notes on 8th November 2016. The old notes were not to be legal tenders and people could deposit them in their bank account till 31 December 2016. To ease the plight of people old notes were accepted for few days in some of the utilities, government institutions and hospitals.

There were both positive and negative effects of this decision. Income tax raids on several hoarders unearthed several billions of dollars worth of cash. Terrorist activities were slowed down in Jammu and Kashmir. The use of e-wallets and card payments went up. Several political parties protested this decision by the government maybe because most are funded by black money and this decision was making it difficult to campaign and fight elections.

The negative effects however were the long serpentine lines outside banks of people waiting to deposit, withdraw or exchange their cash. More than 100 people died standing in these lines, unable to bear the long hours of standing and waiting. The withdrawal limit was also not helping as people could not withdraw as much money they wanted to. People who needed cash urgently like for marriages or funerals were inconvenienced. Some political parties argued that the new 2000 rupees note which were issued to the public would be used to create black money instead of 1000 and 500 rupees and this method alone would not end corruption and black money.

My personal take on this is though I and my family were a bit inconvenienced by demonetization, I think it is better for the country in the long run. A cashless economy would be good for the growth of economy of the country and would increase trust and faith of people at large. Also carrying huge sums of money in the form of mobile or card would be easy without fear of theft or loss.

What do you think about demonetization?

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    • AshutoshJoshi06 profile image

      Ashutosh Joshi 15 months ago from New Delhi, India

      Implemention has been extremly mismanaged so far but having said that removing 86% of currency in circulation in a cash laiden economy was never gonna be easy. I am more curious on what 2017 brings, IT dept. has a daunting task ahead. Do check out my hub on this