Here we are in 2017 November month and the citizen of the India is celebrating Demonetization Anniversary or “anti-black money day” or some protesting it. Let’s see what kind of impact does demonetization really made in the country. Was it a really helpful for all or just “nine days wonder”. Well, it’s not easy to decide and say what impact demonetization exactly made in the country but still, we can review the protest and praises of the Demonetization after all a year has been completed. Although the citizens of the country could get any benefit or not, but the political parties are taking very much advantage of the Demonetization in the country. Let’s go ahead and discuss the objection and admiration.

Political Fight and Demonetization:

Heading towards the political party first, after all its election time and being a citizen of the country it is our duty to take participate in the debate of the Political issues. The face-off between the political parties. Raising any kind of issue without knowing the actual fact and its consequences, always in trend from past so many decades, just to beg vote in the name of defamation of opposition. And this time the issue is really a great one to recall and an observing one to count all the outcomes either in a positive path or having a negative one. On the occasion of Demonetisation Anniversary, the opposition gains most out of it lots of tweets from different ministers opposing the day and calling the day as ‘anti-black money day’ or ‘black day’.

Several of ministers tweeted about the ‘black day’ and reproach the decision and some parties using it as a tool for their advertisement. Without reviewing the actual facts nor justifying the consequences in a conventional way, just using it as a weapon for the opposition. Well, this is politics and everything is fair in politics. (jokes apart) Without evaluating the actual facts and raising a topic like “to make a mountain out of a mole” is just a normal thing in the politics. Actor Prakash Raj also seeking an apology from the executives for the “disruptive impact” of the demonetisation operation. Read more.

Now the question raised it is really a ‘Black Day’ for the nation or is it just a start toward a better nation. Well, we also don’t know about it and searching answers to such questions. The initiate of Demonetisation was a right one or, wrong? We can not say the heard facts as right, we only believe in research and what our research says we are going to discuss.

Initiate of Demonetization:

We all have heard a famous quote that ‘Rome was not built in a Day’ simply suits here. In a single day, we can’t change the whole scenario nor in a year or in two. The initiate was a really revolutionary and an innovative one which shocked the whole nation across the globe in a single day. The Demonetisation was to inhibit over the unaccounted money, corruption, terrorists’ funding, process of money-laundering, and circulation of High-Value money in the market.

If we consider the whole fact of Demonetisation then, it was just an initiate of government to make the country’s economy stable by curbing the black money and implying digitization, to create transparency on the flow of money. In which the government came out with flying colours, nor the initiate was a great success but also it impacted the whole nation in various other ways too, towards development. If we have a look at previous demonetisation in other countries before India then we can compare the facts behind the demonetisation in India and in other countries, how all previous demonetisation of other countries is distinct from the Indian one.

Heading Toward the Successful Demonetization of Other Countries:

Earlier European Union, USA, Zimbabwe, Australia, UK and Philippines successfully introduced Demonetisation in the country. But the reason behind demonetisation was only to change their currency. Some demonetisation took place because some countries joined the European Union, in order to switch the collective countries currency into Euro. Some cause of to change their currency from pounds, shillings, and pence to decimal Currency in the UK, in Australia to replace paper-based notes with polymer one, in Zimbabwe to control their hyper-inflation which was recorded very high. In the USA demonetisation applied to replace their highest value of denomination of $1000, $5000, $10,000 and even $10,000 notes with $100 bill only. The Philippines demonetized its circulated currency from last 30 years with new ones to prevent counterfeiting. Pakistan also demonetised after inspiring by India in 2016 to replace its old notes with the new one.

Heading Toward Now the failure of Demonetization in Other Countries:

Nigeria, Ghana, North Korea, Soviet Union, Myanmar and Congo didn’t take the change well and ended with the collapse of the economy. All the country tried to introduce a new currency in the market and the change which they fail to accept, and Demonetisation for such country was a huge failure. But in India, the change was accepted successfully. So technically we can’t say Indian Demonetisation was such a failure.

But despite all the above facts of demonetisation of other countries, India’s motive behind demonetisation is different. India’s demonetisation was to make the country’s economy stable by curbing the black money and implying digitization, to create transparency on the flow of money. Behind Indian Demonetisation the reason was not only to introduce the new currency but to fight with the corruption and an effort to make our economy stronger and stable.

The whole process of Demonetization was a lengthy one and might show some effect after some years, but definitely if the government’s initiate work then it will change the whole current situation in positive and the decision will surely be count as a revolutionary one. Yet the decision was taken without any much in proper organised manner, which affects the citizens but despite the fact, all supported the action and co-operate with the government to make it a success.

All-over Demonetization Impact on India:

Technically Demonetisation was a liquidity shock for the nation; as the availability of currency was affected. Through which the citizens suffer from lots of issue like production, investment, employment and currency consumption were affected, although we are here after a year of Demonetisation and celebrating the Demonetisation Anniversary. But the citizen of the country supported the initiate to make it a success. Let’s review the whole Demonetisation and what other benefits we get through the initiate. As we divided the benefit of Demonetisation into two part first one is Direct Impact, the name itself describing and another one is Indirect Impact, which is an additional benefit through demonetisation.

Direct Impact of Demonetization:

• Rs 15.28 lakh crore amount or 99% of Rs 15.44 lakh crore was withdrawn from the banks overnight on 8th November, according to the latest report of RBI.
• Several tax-evasion companies who were showing negative opening balance deposited and withdrew Rs 2484 crore. Companies with the balance of 63.60 lakh deposited Rs 18.23 crore and withdrew 18.68 crores during demonetisation.
• 24 lakh shell companies were shut now post demonetisation. Most of the shell companies were registered at the same address and had more than 100 accounts each and a company had 2134 accounts. Total 58,000 bank accounts associated with 35,000 shell companies and had deposited and withdrew Rs 17,000 crore.
• 33% of the total cash which is 5 lakh crore was deposited by only 0.00011% population of India post demonetisation.
• The high denomination notes effectively cut down by 6 lakh crore, the 50% of the current circulated high denomination notes, which is 12 lakh crore.
• Undisclosed income, bank accounts, bank deposits, suspicious transactions all are under suspicion the amount includes in crores.

Indirect Impacts of the Demonetization:

• 21 lakh increase in the registration of new taxpayers and 27.95% number increased in the e-return filing which is now 3 crore.
• 58% of the increase in no. of digital transactions which is now 138 crore in August 2017 in comparison to 87 crores in August 2016. 13 lakh POS sales increased within a year existing 15 lakh POS machines working pre demonetisation.
• Digital Payments receives a significant boost. IMPS (Immediate Payment Service) transactions of 123% in terms of volume and 142% in terms of value in comparison to August 2016 with August 2017. Debit Card Transactions in terms of value increased by 93% and in terms of volume increased by 103% in comparison to August 2016 and August 2017.
• 50 lakh new bank accounts enabling cash-less transactions of wages. Payment of Wages Act was revised to make the direct payment in bank accounts.
• 1.01 crore additional employes linked to EPFO. 1.03 crore workers registered with ESIC for better social security and health benefits.
• Rs 1626 crore Benaami Assets were seized.
• A significant growth in providing better jobs to the poor. Loans became cheaper, Real Estate prices declined.
• Decisive blow to terrorism and Naxalism, black money, drugs, confronting corruption, counterfeit currency, terror funding and sex trafficking.

The nation is forwarding toward Cashless economy instead of black money. Most of all the dependence on cash has reduced. Point of sale (POS) or card swipe rise many e-payment companies watched a significant growth like PayTM, Instamojo Payment Gateway and PayUMoney. Demonetisation is an attempt of structural transformation in the economy.

Debate on GDP after Demonetization:

GDP growth would decrease this year is inevitable. But it was as not bad as the kind of demonetisation the US in 1982 (-3%) minus 3 percent later on 6% in 1983 and in 1984% during the reign of Paul A. Volcker, as U.S. Fed chief who applied Milton Friedman’s monetary theory. Now RBI expects growth in the second half of 2017. World Bank proposed a constant growth with a definite improvement in investment demand.

Demonetisation alone is not responsible for the decrease in GDP growth there are several other reasons behind the slow GDP. It could be GST too which shoved into gold buying and slow down manufacturing. Meat export especially buffalo, the leading contributor to the growth slows down and clubbed in agriculture. Uttar Pradesh, India’s largest, facing shut down of meat processing from the end of March. Savings are now moved to financial assets from physical assets like gold and real estate. There are lots of other factors too that are affecting the country’s GDP slow.

Craft Driven’s View on Demonitezation:

We, Craft Driven, are neither in the support of the Demonetisation nor we are opposing it. We tried to bring some facts and do research on the topic rather than trusting heard things. We conclude that the Demonetisation is really a revolutionary step and it is a success as most of the economists also declare it in the favour. Yet some points are there where we want to clarify from the authority is that they should make transparency about the money laundering process and the owner of the black money should be brought in the front rather than undisclosing their name and providing veil to them.

It has been seen that the process of Demonetisation increased India’s tax base, shut down various shell firms but it would be clearer and provide transparency to the whole activity. All over, Demonetisation is winning the battle against corruption and taking India towards a cleaner economy. A terrible massive attack on corruption, unaccounted money, terrorist and Naxalism funding, the process of money-laundering, and circulation of High-Value money in the market to cleanse India’s financial system.

The success we got, the highest unearthing of black money ever and India’s business reforms, ease of doing business in last three years because of the slew of reforms begun and it is leading the nation to continuous performing progressively well. The constant progress in reforms in a structural and bold approach such as GST and the liberalization of the FDI regime will lead the nation to be a developed country from a developing one. Hoping for well, we wish a great transformation with a great economy in the world and wish India would be considered among the top leading countries like another developed countries in the race.

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