Many authors in India and outside India have been asking question that why was there no intimation about the demonetization to the countrymen? Simple, it would have lost its importance if it got disclosed and Illicit guys would have got suffice time to conceal their illegal cash. But the planning about the demonetization had started 6 months before and only few people knew about this.
So far, demonetization brings INR 5.12 lakh crore, almost INR 5,000 billion, deposit in 9 days since the scheme was announced. As your bio suggests that you are a research candidate in Finance stream at, Harvard, one of the prestigious institutes of the world so I think your intellectualism will tell you that it is always a big boon for the banks to have surplus cash on their hands. Its impact will be that interest rates would be reduced and thus help the common man because they result in reduced EMIs for his leveraged assets like home and car etc.
Defaulters paid their dues and Local Bodies in Profit
Another boastful impact of demonetization is defaulters queue up to settle the loans with old notes. “In the last 10 days, banks have witnessed borrower willingness to clear off default positions (possibly using cash); legal implications aside, banks could see an improvement in small ticket NPLs in the absolute short term.”
Indian government had forced defaulters to deposit their dues and as a result 47 municipalities collected INR 13,192 crore in just 9 days. Mumbai has the maximum share of the increased tax collection at Rs 11,913 crore, which is 90% of the total revenue. This is over three times Mumbai’s collection for 2015. However, Hyderabad accounts for the maximum increase — 26 times the tax collection in November 2015. Surat’s tax revenue of Rs 100 crore marked a nearly 14-fold increase.
Impact on Terrorist Activities
The major impact of demonetization is on terror activities. Around 90% of the fake Rs 500 and Rs 1000 notes come into India from ISI and its associates in Pakistan and demonetization will hamper their capacity to fund terror in India. With terror sponsors running short of big currency notes analysts say the situation in the Valley will improve drastically in days to come. Most of the cash Naxals hold are in big denomination notes which they hide deep inside the forests. News reports quoting sources say Naxals have stashed more than Rs 7,000 crore in Bastar region alone.
Now the news came, thanks to Demonetization that Pakistani printing presses are getting shutdown (that used to print Indian Notes).
Over 80 percent don’t mind inconvenience of demonetization and ready to stand in long queues, says C-Voter poll. Even more than 92%, a poll conducted by PM Modi on his app, people have agreed with his bold decision.
Every step taken by any government doesn’t give 100% satisfaction to their countrymen. Because of demonetization people are still facing lot of problems, but results are on the positive side. People are happy that PM Modi has taken a bold step to eradicate the black money and corruption. I know this scheme alone is not enough to make India a 100% corrupt free country; but we have started on the right track and some years down the line this scheme would have a major impact.
Financial institutions and Civic bodies (municipalities) are getting into good shape from grotesque financial distortion in terms of their deposits and revenues. Because of demonetization, there is an impediment to Terror activities, Fake currency and Hawala business. Despite that, if you still think it is just a big mistake by PM Modi then I would like to tell you please do always have a 360 degree view instead of having an obstinate view before writing any article/blog/op-ed.
I am disappointed that few authors had written a one sided story in their op-ed and blogs without doing any proper research, for which you are known for; and they immediately jump to the conclusion that PM Modi did a mistake and biggest scam in Indian history.
There are few propagandas are being spread that there are 33 deaths in India due to demonetization. It is the morbid moronic mind of his politicians and authors who are linking unfortunate deaths with currency. This is the one article where author busted the propaganda: How demonetization was wrongly blamed for some unfortunate deaths
Recently, the news came Australia may follow the footsteps of India by demonetizing its 100 note.
The ongoing many positive impacts in India and the manner in which citizens are supporting despite facing difficulties I must say that India just made a bighearted and bold step.