The word Demonetization is a current buzz word all over Nation.
The literal definition can be understood as: “Demonetization is the act of stripping a currency unit of its status as legal tender. Demonetization is necessary whenever there is a change of national currency. The old unit of currency must be retired and replaced with a new currency unit.”
But This article will make you understand the impact of demonetization on Nation in a very simple way, Let’s read 30 important impact.
- Banks will get around Rs 10-12 lakh crore amount directly which will empower them to fund the unfunded.
- As Banks and Economics Work on lending, borrowing and interest rates, These amounts will become 3-4 times in couple of years which means, Banks will have around 30-40 lakh crore.
- Government in the form of taxes will be direct beneficiary of around one fourth of deposited amount approx which means, Government will have 3-4 lakh crore in their kitty.
- Fiscal Deficit will go down from 4.1% to approx 2.5% at least.
- Government will have full hands of money and hence Public Investment in Budget 2017 will be almost tripled in all sectors.
- Cash to GDP ratio as said by economists always should be in and around less than 5% but from past a decade it was more than 10%. Post Demonetization it will come back to below 5%.
- Within Cash, Share of Rs 500 and Rs 1000 was of huge 86% which clearly shows the nature of money as illicit. Post Demonetization it will reduce sharply.
- Black Money holders lost all cash in hand and for them Cash In Hand was now not an asset but Now its Non Profitable Asset for them.
- Political Parties and Brokers who manage these parties lost all cash and Now at least for 5 years there will be huge cash crunch for these parties to campaign in Election.
- Elections suddenly became more fairer and free from Vote sale and purchase.
- According to Report by S Gurumurthy, Naxals and their trade of Hafta runs above 40000 crore and these money is all in cash as they can’t deal via Banks. These all 40000 crores now become worthless.
- Naxals have no option instead of surrendering to Police and Army because of Financial Hammer.
- Separatist sponsoring youth of Kashmir for stone pelting now sitting inside their home as there is No Money and those youths are now playing cricket and football.
- 95% attendance in Boards Exam in Jammu and Kashmir showing fruitful signs of accomplishment by this demonetization.
- Counterfeit Currency printed by Pakistan and spread by ISI through the borders of Punjab, Kashmir, Nepal and Bengal all now waste papers.
- Earlier India imports Currency which was manufactured by Germany and Pakistan too import from the same organization making Indian currency vulnerable of duplicate. Now Indian currency gets printed in Mysore and Indore with our own paper and seal making it impossible to match.
- More than 1 lakh crore of fake currency become waste and there by stopping all Terror Funding.
- Drug Racket vanished from hotels of Mumbai and streets of Punjab as they operate only on Cash. There is a huge blow down on Drug Market making them loss of more than 5000 crore.
- World of Gambling and Betting too got a shock as many people involved in it are crying for their money loss as all are done on cash only.
- Rates of Land and Property will get rationalized by more than 30% making it affordable for middle class to buy home for themselves.
- Donations given to Elite Educational Institutions for admission in Medical and Engineering branches will vanish as there will be no illicit cash to give .
- Social Evils like Dowry system too get a major blow as Demonetization will compel them to remove this curse and evil practice.
- All money banked by Babus, Contractors and Mafias in the form of cash are now waste and they now get punished for their corrupt practices.
- Income Inequality in India will now decrease sharply.
- RBI can decrease Repo Rates and there by Banks will decrease loan interest rates marginally which will allow people of this Nation to take loan at lower interest rates.
- Financial Inclusion will happen and all kind of people from Financial Illiterate to Literate will follow the practice of Banking in life.
- The sudden setback will also compel all kind of Traders to go Cashless and use applications like PayTM. Nation will move towards controlled cash Economy if Not Cashless Economy.
- This Demonetization will penetrate into that 96% of population which never submit their Income Tax returns.
- Inflation will go down making goods and services cheaper.
- This demonetization will actually reset the whole Economic System and Now The Computer will Restart with No Virus in it.
I hope this information will benefit you and clear your doubts about the benefit of Demonetization. I will be happy to receive your comments. Do share with friends and families.