Demonetization To Whose Benefit
The Government called it a “ Surgical
Strike On Terrorist Funding And Black Money “ But –
The Indian Supreme Court while hearing
one among a slew of cases filed against the sudden demonetisation decision in
various courts, observed that it "appears to be carpet bombing and not
surgical strike" which government repeatedly claims it to be.
The announcement was made by the Prime Minister of
India Shri. Narendra Modi, in an unscheduled live televised address at 20:00 Indian
Standard Time (IST) on 8 November. In the announcement, Modi declared that use
of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series would be
invalid after midnight of that day, and announced the issuance of new ₹500
and ₹2,000 banknotes of the Mahatma Gandhi New Series in
exchange for the old banknotes. From the midnight of 8th the said
notes became invalid.
The government claimed that the demonetization was an
effort to stop counterfeiting of the current banknotes allegedly used for
funding terrorism, as well as a crackdown on black money in the country. The
move was also described as an effort to reduce corruption.
On 28 October 2016 the total banknotes in circulation
in India was ₹17.77 trillion, of which nearly 86% (around ₹14.18
trillion (US$210 billion)) were ₹500 and ₹1,000 banknotes.
Leakage Of Information:
Governor of Reserve Bank Of India “ Urjit Patel “ informed
that the decision had been made about six months ago, and the printing of new
banknotes of denomination ₹500 and ₹2,000 had already started. However, only the top
members of the government, security agencies and the central bank were aware of
the move. But media had reported in October 2016 about the introduction of ₹2,000
denomination well before the official announcement by RBI.
on 1 April 2016 in a Gujarati newspaper called Akila,
a fortnight before the official announcement, a news report in the Hindi daily
Dainik Jagran quoting RBI sources and The Hindu Business Line on 21 October
2016 have published about coming of 2000 rupee note and about possible
withdrawal of 500 and 1000 rupee notes. There were also reports of 'Ambani
Group and Adani Group ' being informed about the demonetization, and having made
arrangements.
Immediate Effects :
The scarcity of cash due to demonetization led to
chaos. ATMs were running out of cash after a few hours of being functional, and
more than half the ATMs in the country were non-functional. Sporadic violence
was reported across the country and several people were reported to have died
from standing in queues for hours to exchange their old banknotes.
Immediate Effects:
As a combined effect of demonetization and US
presidential election, the stock market indices dropped to an around six-month
low in the week following the announcement.
After the demonetization was
announced, about 800,000 truck drivers were affected with scarcity of cash,
with around 400,000 trucks stranded at major highways across India were
reported. By the second week after demonetization of ₹500
and ₹1,000 banknotes, cigarette sales across India
witnessed a fall of 30–40%, while E-commerce companies saw up to a 30%
decline in cash on delivery (COD) orders.
Was It Effective:
Huge amounts of cash in the form of new notes were
seized all over the country after the demonetization.
In December 2016, over 4 crore in new Rs.2000 notes
were seized from four persons in Bangalore, Rs33 lakh in Rs.2000 notes were
recovered from Manish Sharma, an expelled BJP leader in West Bengal, and Rs.1.5
crore was seized in Goa. 900 notes of the new Rs.2000 denomination were seized
from a BJP leader in Tamil Nadu. Around Rs.10 crore in new notes were seized in
Chennai.
As of 10 December, Rs.242 crore in new notes had been
seized.
If it was their intention to curb black money then the
government is yet to clarify how come such a large amount has been seized in
black money,
Only the coming days will tell us how successful the
attempt is. How far the government succeeds in curbing the Black Money, Terrorist Funding And The Corruption.
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