Works knows that both terrorism and Naxalism

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ly/list/1KKz-8-negative-effects-of-demonetization-in-india Demonetizationwas a very bold step taken by the Prime Minister of India to wash out shadoweconomy and to stop fund flows to terrorism. According to facts, 90% of the money in circulation was brought back, thus distinguishing black money from the Indianeconomy. Demonetization has powered cashless transactions thus brightening upfuture for the cashless economy. But theGDP growth went down as an effect of demonetization. Also, most of the sectorslike agriculture, small scale and medium scale industries were badly hit bydemonetization further adding to the short-term inconveniences caused duringthe days of demonetization.

In a nutshell, demonetization has contributed tothe economy in different ways. The long-run advantages are yet to be seen.Suppressingthe use of black money in political campaigns a lot of black money was used inby political parties and leaders for elections and campaigns. Suppressing thisflow of black money was always a failure in the past but the overnight removal of notes from the market wasa huge hit with this kind of acts. And this has also affected the Naxalism andterrorism everyone knows that bothterrorism and Naxalism run on black moneyand counterfeits.

The demonstration has cut the flow of money to terrorismwhich has felt them weak and down almost ready to be wiped. Themindset of people has changed beforepeople used to think the black market was some kind of figure which can’t betouched by the government but with sudden removal of currency from the economypeople have changed their opinion and also people of India are felt on theirtoes as any day any currency from the economy can be removed with any notice.This was greatly affected the black money markets and counterfeits. Slowly theblack money in the economy will find its way intothe main economy from where the economy will get its boost. This will result ina stronger economy and the value of India currency may go up in the near futureas most of the black money will be turned in to white money Thecashless economy is no longer a dream forIndia. The Indian government plans on bringing a complete stop to the liquid cash and all citizen to do an onlinetransaction where they can to monitor.The demonetization has every citizen of India to have a bank account and make them to all these transactions online where this transition can be watched by thegovernment and tax on the right money and making all the black money in Indiaturn to white money and bringing all of that intothe main economy.

Thelong-term goals of demonetization inIndia are the obvious one is the black money market in India for which Indiangovernment can’t tax upon. The exact figure of black money in the market but it is estimated to be about tens ofthousands of course of the Indian rupee.The movement defectively will help in bringing some to the main economy. Thisdemonetization will force people to have a bank account in the near futureeveryone in India will have a bank account and the number of increased bankaccounts and deposits after demonetization is phenomenal and also every citizenwill be monitored online using their online banking system which will almostkill the black money market.Otherindirect impacts include Kashmir movingto an anomalous position, usage or in fact overdosed usage of apps, a huge fallin the stocks of gold rates and simplification of huge tax policies. Whilstbanking and e-commerce have boomed majorly.Nodoubt demonetization has had a huge blow or impact on the country’s mediainfluence.

The thrust of demonetization was to prevent a parallel economy. Infact and in the most ironical way, this very policy has given birth to a newsociety especially in areas like outskirts of Bengaluru. As Indians struggle tocome on par with this newly introducedpolicy, demonetization has seemed to spread pockets of hardship despite vainattempts and crucial needs like tolls, chemists and hospitals. One thing is forsure demonetization is definitely hampering the present scenario and currentsituation and therefore in the near situation and it is expected to have long-term effects on the country’s exponentialgrowth.

Demonetizationhas a huge effect on the country’s GDP. Let’s put this mathematically, simplerwords being said, the speed or velocity of money is the relative ratio betweenGDP and money in circulation. Also, it isclaimed that it has reduced inflation. Of course,large deposits are going to be in reference to tax scrutiny.

Also due to thedemonetization policy Indian markets had to face a huge loss in the Asianmarkets. Indian economy has always fallen prey to black money and hardcore corruption. There were crores and tonsof black money flowing to and fro and curbing of black money at its peak.Anotherissue is that consumption by this population will be unbalanced. Also, asubsequent huge loss of momentum is another blowing impact. By this policy, notonly has it risked a common man’s life, it has also risked the country as awhole from being the rapid or the fast-growingeconomy. This anyway would lead to reduced consumption, incomes and investment.Another impact is that interests will be imposed on deposits.

Also, there is a huge impact and reduction of black money. Another impact I personallyfeel is important is there is a huge counterfeit in the cash flow or respectivecurrency. One should remember that this could dampen the country’s economy inthe short term. But the benefits are immeasurable and transparency is more.Basically reduced the amount of blackmoney and has long-term benefits.

Anothersubsequent loss would be of the loss of welfare for the population that onceupon a time used this replaced currency.If we consider the country’s economy to be a whole pyramid, the population isknown to constitute the base of the pyramid and if this base is disrupted then,the consequences are understood. The main issue to underline is that stringencyin cash will force the common man to reduce incomes for the blue collaredbeings who earn minimal wages.Demonetizationis all set to mark history and is definitely going to be the economic eventsthat will scrape the timeline of Indian history. But what is most likely to happen in the near future isthat the value of 2000 will reduce since its utility will subsequently reduce.

It has a short-term effect that is’liquidity crunch’. If we deeply research the value of the 500 currency note,constituted nearly forty-nine percent ofthe total country’s economy. This indicated that cash crunch will bepredominant in our country’s economy for the next few months.Allthough all this was widely happening around the country, people still claim tohave found black money.

But the banking mafia has greatly benefitted from thetransactions. We ought to keep in mind that this policy: demonetization is a’one time-act’. We can’t expect a great effect or impact just from this. Butthis is of great help to sideline the big massive losses and it helps insubsequently reducing daylight robbery.Personally, I feel demonetization is not a mode of corruption, not aform of like a scam, it’s just a step or in fact a major step to curb blackmoney. And this step is purely taken in collaboration with RBI.

Anotherimpressive stepping stone to this policy is there absolutely zero trace ofpoverty, a much-awaited result for theIndian government.Althoughthis is highly appreciated, the withdrawal of this once upon a time usedcurrency is a major reason for a wide disruption of the financial activities. It’s for sure that the suddenenforcement of this policy has got the entire nation shaking in utmost havocand chaos in the banking sector and subsequently led to the circulation ofcurrency which is printed and has caused a major standstill in the Indiansubcontinent.

Althoughthere are many demerits and drawbacks, this policy has been widely accepted andappreciated and it was widely agreed upon to completely demonetize 500 and1000’s notes.Ifwe think about demonetization in favoursof the ruling house or in short the government, it has effectively enabled thegovernment to profusely track down black money. Because of this newlyimplemented scheme, the centralgovernment is able to rightly get backits tax returns and incomes.Theintention of the government is to, stop the flow of cash from illegal andexplicit cash.

Everyone all of a sudden becomes accountable and responsible forall the money they hold in possession. Moreover,another additional effective decision taken was it encourages everyone to opentheir own bank accounts and deposit their possession.Whatexactly is demonetization? Making this absolutely clear, it is the absolute andproper enacting of this particular policy with specific cash or currency thatwill replace the current or existing currency. As we all know the currency thatwas replaced is 500 and 1000 Indian rupees and it is expected to fill legal andspecific objectives. We all should understand the fact that the Indiangovernment has enforced this policy in order to resist corruption and abhor thefear of limiting black money and increased stakes on products.Itwas on the 8th of November 2016, hearts were tightened and theentire Indian nation was glued to their respective media sources to know moreabout the demonetization that all of a sudden became a part of the on-goingfinancial reforms.

At first, its merits and demerits were not taken intoconsideration although not completely we can be ignorant of the fact that ithas its own impacts and prospects.Demonetizationin India: Impacts and Prospects16thJanuary 2018MSSM600Dr. Rajneesh MishraTomcyGeorge Thomas


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