Well, at the outset let me clear something that I don’t think, I’m much qualified or capable to comment on the issue of Demonetization. Being a technology professional and coming from the IT industry, I have little knowledge about economics and finance or any kind of monetary affairs, but I wrote this with my realistic view point.
The Term Demonetization:
Let’s start with the term Demonetization. Demonetization means to stop using a particular currency value as monetary standard i.e. the selected currencies (Rs. 500, Rs.1000 in our case) will no longer be valid as legal tender of a country. Recently Govt. Of India banned the use of Rs. 500 and Rs. 1,000 all over the country to stop the use of black money. I’m aware that all the major black money holders of India have only a fraction of their non declared wealth in India and the rest they have preserved in Swiss bank or some other intesimilar to that. So what is the problem if the govt. tries to retrieve even the small pools of black money from the citizens?? We should welcome the step. I believe most people are welcoming the step except very few.
All Benefits with a single stroke:
With one single master stroke, the govt. attempted to handle major malicious facts those are pulling down the Indian economy such as A parallel economy, Fake currencies, terror financing etc.
Next let me come to the point of after effect of this demonetization. I know in this hundred crore populated country, people never support a good move in the beginning and later after knowing the benefits of the particular thing they start supporting but quietly unlike the loud accusations when they are not supporting a move.
Some people are complaining why the govt. didn’t announce this step by giving plenty of time for people to get ready for the situation. Wow! If they could do so, then much more black money hoarders could invest their black money in some other way or they could do something to get their money secure. The govt. has definitely done the right thing by making such noble decision instantly without giving room to the black money holders & terror financers. This was kind of Surgical strike against Black money.
They have just declared
“existing Rs.500 & Rs.1,000 as invalid, still people can use those notes in some emergency places like Hospital, Pharmaceuticals stores, petrol pump, utility bill payments etc. Again they allowed people to exchange their old currencies with new one from bank and given a time period of 50 days (Till December 30th). Isn’t this a good decision?? If you are a genuine person then within this time period you can get all your old notes exchanged, there is almost 2 months of time, but yes it’s a headache for those people who hold lots of undeclared money (this is the black money, which govt. is trying to trace out).
Here RBI should have taken steps to flush out much more Rs.100 notes to the market immediately after the situation, I understand this is one silly mistake they have done. But why people are rushing to get exchange of money?? There is 50 days of time for exchange or deposit of old currency. Why rush to banks and question the govt.??
Again we are living in a digital age where a large percentage of Indians are much more aware about the use of Online Transactions, Credit card/ Debit card payments. Why not use those options for some days until the market is equipped with the new notes? These days from Tea shops to Textile shop everybody is accepting card payment, petrol pumps accepting card payments. You can buy all your utilities with the card payments. I agree that this card holders number is small in India, but if those who have cards stop going to ATM for 1-2 weeks then all other common people will not suffer the rush. Indian youth can stand in a long line of 1 KM to get a JIO SIM(which was provided free of cost by JIO Infocom. LTD few days back), wait up to 4-5 hours to get the first day first show ticket of Shahrukh Khan but they can’t stand in a row at the bank for money exchange or at any ATM. They can’t even be patient to wait until the market gets rid from the effect of demonetization.
All Banks under RBI have a standardize system for deposit/withdral of money with denomination of Rs.100, 500, 1000. Since now the old 500, 1000 notes are declared invalid and new notes have been introduced, they need a minimum of 2 weeks of time to change their hardware and software system. Being a software professional I know how painful a job it is to change a fully functional software system. At least we should give some time of few weeks to Govt, RBI and all banks, but without doing anything we are shouting.
Lastly, I can say as one Best thing can hide hundreds of bad things, this is really a very very good move of Govt. Of India, but still there are some lapses with planning etc. which are nearly negligible and if we stand united we can solve all those issues which have come up due to demonetization. Being a responsible citizen of the Republic of India, I strongly support this decision and I wish everybody should support this for a corruption free India.
NB: This is purely my personal views, if any body have any other or similar view then all comments are welcome.