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"Do good intentions matter if they lead to bad outcomes."

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"Do good intentions matter if they lead to bad outcomes."

Post by prernajain on Tue Nov 22, 2016 5:10 pm

Comment on the above statement in context of present demonetization?
Analyse what troubles present demonetization and what are its likely impact?

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Komal Khanna PGFA1623 on Tue Nov 22, 2016 6:17 pm

I appreciate the person who do something with good intentions but if it gives bad output it will effect the other person very much.
Same is the case here, when our H'nble PM Narendra Modi ji announced that Rs.500 and 1000 notes will not be legal after 12 a.m. 8th November, it was a big shock to the whole nation. He thought this with good intentions to remove corruption, black money and remove terrorism. His fight is to delete the corrupt storage of black money. But what it has led to is in front of us, people are standing in line daily to exchange the notes. The rural people don't have cheque to exchange money. They all are upset with this decision. It has come as a bad outcome for everyone. The middle class people, and specially the rural poor are suffering a lot. Rural poor have all the money in cash and no bank account. The decision was taken for the welfare of common people, NaMo already told to create bank accounts to rural people, etc. but we can see some are happy while others are not.

What troubles present demonetization?
The rural poor who do not have bank accounts are facing big problem, still kashmiris are not having the new notes with them, Supreme Court sat several times to discuss the issue, the opposite party raised its voice against this and all the halla hoo that is shown everyday in the news channels!!

Impacts:
*Liquidity crunch (short term effect): liquidity shock means people are not able to get sufficient volume of popular denomination especially Rs 500. This currency unit is the favourable denomination in daily life. It constituted to nearly 49% of the previous currency supply in terms of value. Higher the time required to resupply Rs 500 notes, higher will be the duration of the liquidity crunch.
*Welfare loss for the currency using population: Most active segments of the population who constitute the ‘base of the pyramid’ uses currency to meet their transactions. The daily wage earners, other labourers, small traders etc. who reside out of the formal economy uses cash frequently. These sections will lose income in the absence of liquid cash.
*Impact on black money: Only a small portion of black money is actually stored in the form of cash. Usually, black income is kept in the form of physical assets like gold, land, buildings etc. Hence the amount of black money countered by demonetization depend upon the amount of black money held in the form of cash and it will be smaller than expected.
*Impact on bank deposits and interest rate: People have saved this money into banks just to convert the old notes into new notes. These are not voluntary savings aimed to get interest. It will be converted into active liquidity by the savers when full-fledged new currency supply take place. This means that new savings with banks is only transitory or short-term deposit. It may be encashed by the savers at the appropriate time. It is not necessary that demonetization will produce big savings in the banking system in the medium term.

Demonetization has a big propaganda effect. People are now much convinced about the need to fight black income. such a nationwide awareness and urge will encourage government to come out with even strong measures.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by rakshita jain on Tue Nov 22, 2016 7:24 pm

I appreciate with the statement that if a persons do something with good intentions results bad it effect the other person . The demonetisation effort being led by PM Modi in India is that idea that Rs 500 and Rs 1,000 notes should be declared no longer legal tender, to be replaced by other notes of different designs and in one case, denominations. The aim is to wash the stock of “black money” out of the economy and get it into the licit, banked and taxable, part of the economy, but on the other hand people faces too much problems also like there will be disruption in cur as households are likely to get affected by the note exchange terms laid by the government. Though clarity is unfolding on this, commodity transactions and general cash market transactions are likely to feel an immediate impact.norganised sector proceedings, including small trade market activities, will remain volatile in the short-term. Roadside vendors, cab drivers, kirana stores, etc., have already stopped accepting Rs 500 and Rs 1,000 notes. It is important to note that a significant percentage of the Indian workforce is employed in this sector, which is likely to be affected by immediate liquidity issues. Overall, negative impact on disposable income is expected along with likely disruption in consumption patters of general purchase.The idea of demonetization is good but it has to be taken into consideration that most of the black money is kept in the form of land, buildings or gold or kept abroad. What is in cash constitutes only 4% of the total amount of black money on which taxes are not being paid. Out of this, a lot of money is in circulation in everyday transaction like if someone is building a house; the bill is not paid through banks for sand, bricks etc. This money goes into the other systems though it has been drawn from bank. These things will come under control with this step. daily wage labourers and traders are suffering because of lack of proper planning, intelligence and foresight such as recalibration of ATM machines. There was need to pile up enough 100 Rupee notes and other smaller denomination notes in the market before taking this step. It is being said by critics that this step was taken only to bolster the image of the Prime Minister as he has been unable to deliver on GDP growth, inflation and bringing the black money from abroad.The stock of the black economy constitutes a major part of the GDP is significant. Even if 50% of this amount is withdrawn, the kind of relief that RBI will get on its liabilities and the sort of deposits commercial banks will get will lead to a rise in the deposit and later on there will be decrease in lending rates plus fiscal deficit. The black money in circulation is like a steroid in the economy which keeps the demand going gives a feeling that everything is working well. The problem is that investment is not taking place in the economy and the rate of growth of capital formation is down. The only way to bring this up is to divert more funds into investments which will happen when the cost of capital comes down. Demonization is one move in the fight against corruption.
The impact this move would bring to parallel economy are :
1) REDUCE UNACCOUNTED MONEY & COUNTERFEIT CURRENCY
2) ILLEGAL ACTIVITIES

The impact on the Main Economy :
1) LIQUIDITY CRISIS & DEFLATION
2) ECONOMIC GROWTH
Demonistisation will have its inconvenience in the short run but will ultimately yield great results in the long run.
So far, it can be said that this is a historical step and should be supported by all. One should look at the bigger picture which will definitely fetch results in the long term.  This is what the people have been asking for a long time which has finally happened.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by kiran.18j on Tue Nov 22, 2016 8:35 pm

In my opinion good intentions matters like in the current scenario Narendra Modi has announced the demonetization of Rs 500 and Rs 1000 but if it lead to bad outcomes it can effect the economy in opposite way .Narendra Modi has made an announcement on 8 Nov. 2016 that from now rs 500 and rs 1000 notes will be invalid and announced the issuance of Rs 500 and 2000 notes. This decision was taken to stop the notes used for terrorism and to cut short the black money & to reduce corruption in the economy But from his decision small farmers, sellers,merchants,daily wage labours and traders are suffering because some them are not having bank accounts and other people are standing in line to exchange their old notes from morning till evening and the ATM machines are also not working properly.So in this way people are suffering from this decision, mostly those who rely on cash transactions not those who pay through plastic money .Before taking this step their should be enough Rs 100 notes and other smaller denomination notes available with the bank so that people can exchange their currency

What Troubles Present Demonetization?
1) The rural people are facing problem because of not having bank accounts.
2) several ATM's across the nation continue to be useless because of not having enough fresh notes.
3)  shortage of Rs 100 notes because of improper planning.
4) New Rs 2000 note is useless for daily or day to day transactions.
5) People have to stand in that long line to exchange the money and wait for long hours.

IMPACTS :
Impacts can be positive and negative both .
positive impact of demonetization on the economy:-
It will help the Government to reduce the portion of black money, corruption in the economy.
Terrorism related activities will also be controlled because of lack of funds.
With the new limits on ATM withdrawals being restricted to Rs 2,500 per day and Rs 24,000 a week, it will drive the card payments across the country or simple it is bringing the economy in new era i.e cash less economy (card transactions are replacing the cash transactions).
It will help the common man as the land prices will fall because of shortage of sellers and buyers.
Negative Impacts Of Demonetization:
Most of the black money would have already been converted into non monetary assets.i.e gold
Inconvenience to common people who will start running to the nearby bank to exchange the 500 and 1000 currency notes.
Very difficult for more than half the population who are not well versed with the card transactions.
This move deeply impacts the working sections of society: drivers, maids, cooks, electricians, plumbers. Anybody who provides services in the informal sector and depends on monthly cash payments.

Demonetization has affected the economy in both ways but in long run it will lead to increase in growth rate, as to some extent black money will be converted into white money.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Kunwar Kartikay on Tue Nov 22, 2016 8:38 pm

Firstly, what is demonetization:

It is a financial step in which a currency unit's status as a legal tender is declared invalid. This move is usually executed when old currencies have to be replaced by new one's or whenever there is a change of national currency. However, in the present situation the move proved to be surprise as citizens had only 4 hours to react to the PM's statement. It is to be noticed here that this was not the first time that India went for the demonetisation of high-value currency.

Trouble due to present Demonetisation:
Poor people like farmers, daily workers, travellers, old people, people on medicine etc are the one who are suffering the most, as most of them either are not having a bank account or are finding hard to get work, or even are facing the difficulties in getting the change amount.
Even that to, every common man is facing the problem in term of getting the cash from the banks or even from the ATM’s as the govt. lacks the proper planning before implementing this particular demonetisation.

Impact of the Demonetisation:
Loss of Growth momentum- India risks its position of being the fastest growing largest economy: reduced consumption, income, investment etc. may reduce India’s GDP growth as the liquidity impact itself may last three -four months. 

Impact on black money: Only a small portion of black money is actually stored in the form of cash. Usually, black income is kept in the form of physical assets like gold, land, buildings etc. Hence the amount of black money countered by demonetisation depend upon the amount of black money held in the form of cash and it will be smaller than expected. 

Impact on counterfeit currency: the real impact will be on counterfeit/fake currency as its circulation will be checked after this exercise.
Election Funding-Most of the money used by political parties are high end money use to buy candidates so it will put a stop here.

Transparency -It will bring more transparency in the long run (cashless economy). Since circulation in counterfeit currency will see the end soon.

Demonetisation as a cleaning exercise may produce several good things in the economy. At the same time, it creates unavoidable income and welfare losses to the poor sections of the society who gets income based on their daily work and those who doesn’t have the digital transaction culture. Overall economic activities will be effected in the short term. But the unmeasurable benefits of having more transparency and reduced volume of black money activities can be pointed as long term benefits.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by mayank khatri on Tue Nov 22, 2016 8:43 pm

What is Demonetization ?
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.

The demonetization of ₹500 and ₹1000 banknotes was a step taken by the Government of India on 8 November 2016, ceasing the usage of all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series as a form of legal tender in India from 9 November 2016.
The decision has been taken by prime minister for the betterment of the society but the outcome of the decision is really impacting the country.
IMPACT OF DEMONETIZATION
Most of India’s business environment has been tremendously shaken up by the recent demonetization of the higher currency notes by the Modi government. This is the third demonetization exercise undertaken by the Indian authorities, if we include the one done just before independence in 1946. It is still too early to accurately gauge the depth of the shakeup this has caused, but its impact on the real estate sector is immediately visible.
• IMPACT ON REAL STATE
The real estate sector will definitely be affected by the demonetization exercise, as it has traditionally seen a very high involvement of black money and cash transactions. However, almost all such incidences have been in the secondary sales market, where cash components have traditionally been a veritable ‘must’. In other words, the resale properties segment will take a big hit.
• IMPACT ON STOCK MARKET
The day after the demonetisation move was announced  the BSE Sensex opened with a massive loss of 1,300 points. A lot of investors are withdrawing capital from stocks. Some because they are out of funds (since the currency they had at home no longer works) and others because they expect a crash, perhaps an opportunity to buy at lower levels.
• IMPACT ON SOCIETY
Low-income people have been impacted as their payments are delayed.
-Some people may commit suicide.
-Cashiers and bankers will get due respect in society.
-Marriages to become cheap. Death of dowry.
-All medicines in white money.
-Big blow to gambling.
-Death of drug mafia and terror networks.
-People now know moral status of their peers and neighbours better.
Demonetization may benefit India in long term:
1. Income taxes rates may come down.
2. Loans will become cheaper.
3. Housing will become affordable.


Last edited by mayank khatri on Fri Nov 25, 2016 7:16 pm; edited 1 time in total

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by prerna khandelwal on Tue Nov 22, 2016 9:56 pm

I would admire when someone is truly trying to make a difference. sometimes they get fail at it and cause unforeseen harm or pain but it could be for a particular time and can give better result in forthcoming time.

In context of demonetization, On November 8, Indian Prime Minister Narendra Modi announced in a broadcast to the nation that Rs500 and Rs1,000 currency notes would no longer be recognized legally as currency.

The aim behind the government’s action was to combat tax cheating, counterfeiting and corruption. Eliminating large denominations makes it harder to hide large amounts of cash. Modi noted that the move complements the country’s swachh bharat abhiyan (Clean India campaign). “For years, this country has felt that corruption, black money and terrorism are festering sores, holding us back in the race towards development,” “To break the grip of corruption and black money, he has decided that the currency notes presently in use will no longer be legal. The goal of this is to clean transactions to clean money.''

The demonetization move has affected large sections of urban India and thrown their life out of gear, many (not everyone but a substantial number) are singing paeans in favor of the very move that has knocked them out. These include highly educated individuals too and privately when cornered they admit that the move could have been planned and implemented more sensibly. But in public they are empathic supporters of demonetization and assert that this one step that will take the country and economy forward and rid of the corrupt and those who have make trouble at the vitals of the economy for so long.
The picture on the streets had begun changing somewhat: The demon started surfacing. India is a cash economy; almost everyone keeps a few Rs500 notes, Lines began forming in front of ATMs and banks which could exchange old notes for new. A mere exchange — a new Rs500 for an old Rs500 — was not enough; there was also a limit imposed on how much one could exchange or withdraw from their accounts. In some cases, there were altercations as people waited for hours. Gas pumps and hospitals (which were allowed to accept old notes) saw a boom in business. People also wanted smaller currency notes to serve their daily needs. A loaf of bread costs Rs25. No shopkeeper would give change for Rs500. But the need for the government to keep the move a secret — so that tax evaders wouldn’t be alerted before the demonetization took place — affected preparedness. It will take two-three weeks to reconfigure the ATMs to handle the newer and larger notes. A Rs2,000 note has also been introduced. Modi has suggested it will take 50 days (until the end of 2016) for people to adjust to the change.

This step will make a positive difference, if the challenges get handled well by the administration.



IMPACTS-:

At the stroke of the hour on midnight of 9th November 2016, India lost 86% of its monetary base. The print, electronic and social media has been praising Prime Minister’s masterstroke by which he has reportedly destroyed the base of corruption in India. In this single move, the Government has attempted to tackle all the three issues affecting the economy i.e. a parallel economy, counterfeit currency in circulation and terror financing.

The idea of demonetization is good but it has to be taken into consideration that most of the black money is kept in the form of land, buildings or gold or kept abroad. What is in cash constitutes only 4% of the total amount of black money on which taxes are not being paid. Out of this, a lot of money is in circulation in everyday transaction like if someone is building a house; the bill is not paid through banks for sand, bricks etc. This money goes into the other systems though it has been drawn from bank. These things will come under control with this step.

Small farmers, sellers, merchants, daily wage labourers and traders are suffering because of lack of proper planning, intelligence and foresight such as recalibration of ATM machines. There was need to pile up enough 100 Rupee notes and other smaller denomination notes in the market before taking this step.
People are facing problems because the limit of withdrawal has not been kept at a higher level. If this would have been kept at a higher level, there were chances that the recycling of black money might begin. The ideal money in circulation has to come to the banking channels.
This is a terrible setback for the international standing of the Indian economy. At this time, the economy is struggling with slowdown. There is demand sluggishness in the economy leading to practically no private sector investment and stagnant industrial growth. If we look at the farm sector, this is the harvest time. Farmers generally deal in cash and India is also largely a cash economy. The cash transactions in this economy are far more than the total number of electronic transactions done on a daily basis. In the tribal heartland of the country, the poor people through middlemen are getting their currencies exchanged for Rs.300 or Rs.400 because of lack of proper information which is hitting them.

Demonetisation is an important step in the fight against the finance of terrorism. However, it should neither be the first nor the last, if the interlinked threats of corruption, crime and the finance of terrorism have to be controlled. These must also not be addressed simply within departmental and ministerial silos. Instead, an all-of government approach is imperative if each of these challenges is to be met.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Neetu Singhal on Wed Nov 23, 2016 12:15 am

Good intentions always matter weather they lead to bad outcomes or good outcomes.Because it is not always necessary that if a decision taken with good intentions will start giving good outcomes at the same moment sometimes it may leads to the bad outcomes in the beginning but will give good results in future Like in demonetization case when PM Modi announced demonetization of Rs.1000 notes and Remonetisation of Rs.500 notes, his intentions behind this decision is to remove black money and terrorism from our country but from his decision people are facing a lots of problems. They have to stand in queues for long time in Banks, ATMs to deposit or to withdraw the money. Even most of the banks do not have cash so people are facing cash problem as old notes are not accepted any where and new notes are not there in banks in that much limit. But these problems will not remain forever they will all been solved soon and than we will realize that this decision taken by him is good for our country. His decision of demonetisation is good but the black money which is kept in the form of Gold, Land and Building will not be removed, so this decision will not remove the black money completely but upto some extent it will help.
Troubles due to demonetization are:
1. People have to stand in long queues in banks to exchange their money or to deposit or withdraw some money.
2. Shortage of money in banks and ATMs.
3. People who do not have bank accounts are facing problem.
4. Travelers and Farmers are also suffering a lots of problem due to demonetization.

Impact of demonetization
Demonetization has hit the whole country and the real estate sector is one of them. Property rates are expected to decline by 20% in this period. Demonetization has a great impact as it will reduce the black money and corruption and terrorism too not completely but upto some extent. In future terms if we see the impact of demonetization it will reduce the tax rates in future which will benefit the people. GDP growth rate is been reduced due to demonetization.
It will help in making the whole India digitalized as more and more people will shift to online payment modes like paytm, NEFT banking and all.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by ashi gupta on Wed Nov 23, 2016 4:51 pm

Good intentions are always appreciable irrespective of the type of the initial outcome it lead to , as the long term outcome is always positive. Same is the case of demonetization. The demonetization of Rs.1000 and Rs. 500 bank notes was a step take by government of India on 8th November 2016, ceasing the usage of Rs.1000 and Rs.500 notes as a form of legal tender in India from 9 November 2016. The intention of government to demonetize the currency notes is highly commendable as it will fight against corrupt storage of black money, fake currency and terrorism. generation of black money is the major factor due to which development of economy is laggarding. So it was necessary to take this step as it will keep check on terror financing and pumping of illegal currency into the market.
Now after taking such a step it is necessary to implement it properly as it requires a lot of efforts to reap benefits out of it. but as far as execution is concerned it has raised the serious question about the difficulty poor farmes, small traders and common man is facing. people have to stand in long queue at ATMs for getting cash. ATM machines are not working properly. Banks need to operate overtime to meet the demand of their customers. As the transactions limit is set so it created problem for household who are in urgent need of money.

Troubles due to demonetization:
1) Foreign tourist are facing problem.
2) One has to stand in long queue to withdraw his own money from his own account.
3) Small farmers, sellers, merchants, daily wage laborers are suffering because of lack of proper planning.

Impact of demonetization:
1) Consumption will be hit due to liquidity shortage.
2) India's rate of growing faster will be affected.
3) Real estate sector will take a big hit.
4) Uprooting of parallel economy.
5) Increase usage of online transactions and alternative modes of payment.
6) Demand in the sectors like consumer good, real estate, gold and luxury goods will fall.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by priyanka3004 on Wed Nov 23, 2016 5:21 pm

Yes, good intention matter weather that lead to a good outcomes or bad because it is not necessary that the decision which is taken form good intention will always lead to good outcome. mistake can be done by anyone.
in the case of demonetization, Narandra modi's intention was very good but the outcome for some people come bad.

What is demonetization?

Demonetization for us means that Reserve Bank of India has withdrawn the old Rs 500 and Rs 1000 notes as a official mode of payment. It is the act of stripping a currency unit of its status as legal tender.
Demonetization is a generations’ memorable experience and is going to be one of the economic events of our time. Its impact is felt by every Indian citizen. Demonetization affects the economy through the liquidity side. Its effect will be a telling one because nearly 86% of currency value in circulation was withdrawn without replacing bulk of it. As a result of the withdrawal of Rs 500 and Rs 1000 notes, there occurred huge gap in the currency composition as after Rs 100; Rs 2000 is the only denomination.
Absence of intermediate denominations like Rs 500 and Rs 1000 will reduce the utility of Rs 2000. Effectively, this will make Rs 2000 less useful as a transaction currency though it can be a store value denomination.
Demonetization technically is a liquidity shock; a sudden stop in terms of currency availability. It creates a situation where lack of currencies jams consumption, investment, production, employment etc. In this context, the exercise may produce following short term/long term/, consumption/investment, welfare/growth impacts on Indian economy. The intensity of demonetization effects clearly depends upon the duration of the liquidity shocks.

What was the reason?

The reasoning given by Modi was----
1) To tackle black money in the economy.

2) To lower the cash circulation in the country which "is directly related to corruption in our country, " according to PM Modi.

3) To eliminate fake currency and dodgy funds which have been used by terror groups to fund terrorism in India.

4) The move is estimated to scoop out more than more than Rs 5 lakh crore black money from the economy, according to Baba Ramdev, a staunch Modi supporter.

TROUBLES DUE TO DEMONATIZATION

1.) People who lives in rural area they are still facing problem because they are not having any bank account as narander modi has told them earlier to get open the bank account but till now many are there who are not having there one bank account.
2.) This step which is taken by narander modi is very good but all the bank should have been prepared more well so that the comman people would not be facing such kind of problem which they are facing now by standing long hour in a queue for cash.
3.) foreign tourist is also facing lots of problem due to this demonatization.
IMPACT OF DEMONATIZATION

1.) Demonetization is not a big disaster like global banking sector crisis of 2007; but at the same time, it will act as a liquidity shock that disturbs economic activities.
2.) Consumption will be hit: When liquidity shortage strikes, it is consumption that is going to be adversely affected first.
Consumption ↓→ Production ↓→ Employment ↓→ Growth ↓→ Tax revenue ↓
3.) Loss of Growth momentum- India risks its position of being the fastest growing largest economy: reduced consumption, income,      investment etc. may reduce India’s GDP growth as the liquidity impact itself may last three -four months.
4.) Welfare loss for the currency using population: Most active segments of the population who constitute the ‘base of the pyramid’ uses currency to meet their transactions. The daily wage earners, other labourers, small traders etc. who reside out of the formal economy uses cash frequently. These sections will lose income in the absence of liquid cash. Cash stringency will compel firms to reduce labour cost and thus reduces income to the poor working class.
5.) Impact on black money: Only a small portion of black money is actually stored in the form of cash. Usually, black income is kept in the form of physical assets like gold, land, buildings etc. Hence the amount of black money countered by demonetization depend upon the amount of black money held in the form of cash and it will be smaller than expected. But more than anything else, demonetization has a big propaganda effect. People are now much convinced about the need to fight black income.  such a nationwide awareness and urge will encourage government to come out with even strong measures.
6.) Impact on counterfeit currency: the real impact will be on counterfeit/fake currency as its circulation will be checked after this exercise.
7.) Liquidity crunch (short term effect): liquidity shock means people are not able to get sufficient volume of popular denomination especially Rs 500.  This currency unit is the favourable denomination in daily life. It constituted to nearly 49% of the previous currency supply in terms of value. Higher the time required to resupply Rs 500 notes, higher will be the duration of the liquidity crunch. Current  reports indicate that all security printing press can print only 2000 million units of RS 500 notes by the end of this year. Nearly 16000 mn Rs 500 notes were in circulation as on end March 2016. Some portion of this were filled by the new Rs 2000 notes. Towards end of March approximately 10000 mn units will be printed and replaced. All these indicate that currency crunch will be in our economy for the next four months.
CONCLUSION
So far, it can be said that this is a historical step and should be supported by all. One should look at the bigger picture which will definitely fetch results in the long term.  This is what the people have been asking for a long time which has finally happened.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Aastha Ahlawat on Wed Nov 23, 2016 7:32 pm

I will write in favor of the will,and yes good intentions always matter either the thought will be fruitful or not.Now in case of demonetization, it actually happened that intentions was all good but most of the people are against the decision of our P.M Narendre Modi because in India earlier it was like rich was getting more rich and poor people are getting more poor. Moreover In-fact I saw from my own eyes that people had a lot of black money in terms of Rs.500 & 1000 before demonetization of 1000 and remonetization of 500 so this kind of decision was much needed and very well did by our P.M.
Also,this was important to remove corruption from India .I agree that a lot of people from rural and urban area even I also suffering in that cash exchange issue and bank lines are so long and it takes a huge from people to exchange their own currency.
The most important thing is that black money is of no use or the people who is had that corrupted money are helpless and either they are burning their black money or throwing out., so, this was very pre planned decision taken by Modi Ji.

Now Troubles present demonetization are :-
Rural Areas and senior citizen are suffering the most as in rural areas most of the people are like they do not have their bank accounts and senior citizen are not that much capable of standing in in the lines from morning to evening.
Moreover,Businessman are also suffering how to adjust their money.. Very Happy .....
Basically everybody is facing problem due to this step of Modi Ji as this decision is out of everyone comfort zone.

Now Impact of Demonetization:-
1)India's Rs 500 And 1,000 Demonetization Is Lowering Interest Rates And Also Inflation:
“All rates will fall,” said SBI Chairman Arundhati Bhattacharya. “The bank has seen huge inflow of deposits but demand for credit has slowed down. Therefore, lending rates too will fall but after a gap''
2)In my point of view this will the biggest impact and that is the value of Indian rupee will increase after some time for example in comparison of dollar and others also.
3)Another one impact will be all the things will become digital for example even now-a-days Paytm is like booming in the market.
4)On agriculture also their will be impact:-
Agriculture sector which contributes 15% to India’s total output.
Also, agriculture is impacted through the input-output channels as well as price and output feedback effects. Sale, transport, marketing and distribution of ready produce to wholesale centers or mandis, is dominantly cash-dependent. Disruptions, breaks in the supply chains feedback to farmers as sales fall, increased wastage of perishables, lower revenues that show up as trade dues instead of cash in hand and when credited into bank accounts with limited access affect the sector.
5)Terrorism will also impact specially that as usual kashmir fight because their is a lot of import and export of fake currency specially from near by countries ,.so from this point of view also Modi Ji took a GREAT and EFFECTIVE decision.

Conclusion: Basically for some time people will suffer but after some time when their will be settlement of ATMs properly and exchange of currency will done by common people their will be no issue and the output will start coming which will be in favor definitely and economic condition will improve which was the main motive behind the surgical strike.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by pallavi maindola on Wed Nov 23, 2016 11:36 pm

Some one rightly said,”The road to Hell is paved with good intentions” Now, that doesn't mean that everyone who fails even with good intentions is going to hell.

At the stroke of the hour on midnight of 9th November 2016, India lost 86% of its monetary base. In the wake of Prime Minister Narendra Modi’s announcement that Rs 500 and Rs 1,000 currency notes will no longer be legal. The print, electronic and social media has been praising Prime Minister’s masterstroke by which he has reportedly destroyed the base of corruption in India. In this single move, the Government has attempted to tackle all the three issues affecting the economy i.e. a parallel economy, counterfeit currency in circulation and terror financing. There is no doubt that Prime Minister has pulled out a major coop and substantially enhanced his reputation as a strong leader. Demonetization is an established practice in monetary policy to tackle black money. The Prime Minister has explained it as a financial surgical strike

Note: Demonetization is the act of stripping a currency unit of its status as legal tender. it is basically a Process of removing a currency from general usage, or circulation. The old unit of currency must be retired and replaced with a new currency unit.

Troubles people are facing presently after demonetization:

It's simple , the problem everyone is facing right now is lack of money to exchange for the balance of amount you had paid.

1.From Nov 8 onwards no business organization or shops expect hospitals and some government offices and petrol pumps(allowed for a short period of time)are given the permission to collect 1000rs and old 500rs notes as it was banned. If they are collecting these banned notes, then it would be considered as black money, when they are submitting the income reports to income tax.

2.As people are receiving only 2000rs from banks in exchange of their old money,they are not able to pay the balance amount if a person made a purchase of 1000rs, then there is no money to pay back the balance 1000rs. The shopkeeper will have no other option other than to cancel the purchase and at the same time the buyer will not be able to get the products he need. This is happening all over India from hotels to medical shops, from hospitals to bus depots.
3.In a broad sense all you get from the bank is 2000rs notes and you won't be able to eat a meal from a hotel as they won't have the change to pay you back(unless you are going to some 5 star hotels).

4.People queue on line to withdraw money but as all because of lack of currency,everone is facing problem.
5.Demonetization of the high value currency notes did not affected the rich people or the business class but majorly to the people from the villages or rural areas.People are very much disturbed by this demonetarization. Farmers are not getting seeds and fertilizers. the situation in the rural areas is very bad as the banks have failed to transport the stock of the new currency in the ATMs and branches in rural and semi urban areas.

6.Cash-crunch triggered by demonetisation of Rs. 500 and Rs. 1,000 notes is not only causing inconvenience to people in the country, but foreign tourists visiting here are equally troubled as they are unable to use smaller denominations.

Statement by a foreign tourist: “I cannot buy a ticket because the ticket counter told me that 500 rupee and 1,000 rupee notes do not work here. I don’t know how, but I cannot find a way in India”, said a Chinese tourist.

7.Small farmers, sellers, merchants, daily wage laborers and traders are suffering because of lack of proper planning, intelligence and foresight such as re calibration of ATM machines.

Likely Impact:

Demonetization is a generations’ memorable experience and is going to be one of the economic events of our time. Its impact is felt by every Indian citizen. Demonetization affects the economy through the liquidity side. Its effect will be a telling one because nearly 86% of currency value in circulation was withdrawn without replacing bulk of it. As a result of the withdrawal of Rs 500 and Rs 1000 notes, there occurred huge gap in the currency composition as after Rs 100; Rs 2000 is the only denomination.
• Liquidity crunch (short term effect): liquidity shock means people are not able to get sufficient volume of popular denomination especially Rs 500.  This currency unit is the favorable denomination in daily life. It constituted to nearly 49% of the previous currency supply in terms of value.
limitations on cash withdrawal is impacting the working capital of exporters and on real estate sector.

• Welfare loss for the currency using population: Most active segments of the population who constitute the ‘base of the pyramid’ uses currency to meet their transactions. The daily wage earners, other labourers, small traders etc. who reside out of the formal economy uses cash frequently. These sections will lose income in the absence of liquid cash.

• Consumption will be hit: When liquidity shortage strikes, it is consumption that is going to be adversely affected first.  Loss of Growth momentum- India risks its position of being the fastest growing largest economy: reduced consumption, income,investment etc. may reduce India’s GDP growth as the liquidity impact itself may last three -four months.
• Impact on counterfeit currency: the real impact will be on counterfeit/fake currency as its circulation will be checked after this exercise.

On the other hand it has good impact as well.it will be a long term profitability for Indian economy and will help in growing each and every sector of the country.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by kanishka mani on Thu Nov 24, 2016 12:11 am

In my opinion the intentions does not matter if we are working in a corporate, because if you are doing anything in your workplace with good intentions and the result is not the expected one than no one will matter to your Good Intentions because they want only result no matter you did it with good or bad intentions.
If we talk about Modi's decision of demonetizing the ₹1000 note and re-monetizing the ₹500 note, the good intention behind this is taking out the black money from the holders and make the India Progress in every aspect,but when this decision have passed we all got panic and start criticizing him. The opposition party is criticizing him continuously with knowing his intentions behind this.
If we talk about our daily life this happens with us so many times, for example we organize a party for a friend who is having his exam next day, we have good intentions but due to this that friend has to suffer in his exam,so he might be happy at the time of party but at the time of exam he will regret and criticize.
I would like to add further in my previous opinion that intentions does not matter when the result is bad. The matter is that in today’s world no one care about your intention everyone is focused on the results only. If I take an example of Mr. Arvind Kejriwal who imposed a rule of odd even in Delhi for decreasing the rate of pollution in Delhi, all started opposing it just because they have to face some difficulties in the day to day travel, they did not look in the view of pollution they were just concerned for themselves. We all knew that the step was good for our own sake but no one gives a damn to these intentions if there is no profit in that of their own.
So in the last i conclude that yes good intentions does not matter when there is any personal loss happen to you.


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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Niharikasingh18j on Thu Nov 24, 2016 5:45 pm

i appreciate the decision taken by our honorable PM Mr. Narendra Modi as it will be help in combating black money and which will eventually help in the development of the economy as well as development of our nation,the intentions behind it was all good but most of the people are against the decision of our P.M moreover even i have seen that people had a lot of black money in terms of Rs.500 & 1000,so this kind of decision was much needed and very well done by our P.M.
Also,this was important to remove corruption from India .I agree that a lot of people from rural and urban area are suffering in that cash exchange issue and bank lines are so long and it takes a lot of time of people to exchange their own currency.
The most important thing is that black money is of no use to the people who is having that corrupted money they have become helpless and either they are burning their black money or throwing out., so this was very pre planned decision taken by Modi Ji.
it is rightly said that ITS THE THOUGHT THAT COUNTS irrespective of the result that it brings. There are currently a lot of problems faced by the people like standing in long queues of banks, going out of cash, problems faced by foreign tourists and persons not having a bank account. even people like Mr Arvind Kejriwal are totally against it but people are also with this decision as they know that the decision will eventually be problematic but will provide fruitful results in the long run.
The basic impacts of demonetization will be:
1) the real impact will be on fake currency as its circulation will be checked.
2) the value of Indian rupee will increase after some time
3)The daily wage earners, other laborers, small traders etc. who reside out of the formal economy uses cash frequently. These sections will lose income in the absence of liquid cash. Cash stringency will compel firms to reduce labor cost and thus reduces income to the poor working class.
So in the end i would just like to say that it will take a little time to cope up with certain things and people should cooperate with the government for some time as things are likely to go better in the end.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by kshitiz agrawal on Thu Nov 24, 2016 6:28 pm

Yes, good intentions always matter either the thought will be fruitful or not.In the current scenario Narendra Modi has announced the demonetization of Rs 500 and Rs 1000 but if it lead to bad outcomes it can effect the economy in opposite way . He thought this with good intentions to remove corruption, black money and remove terrorism. His fight is to delete the corrupt storage of black money. But what it has led to is in front of us people are standing in line daily to exchange the notes. The rural people don't have cheque to exchange money. The decision was taken for the welfare of common people, Narendra Modi already told to create bank accounts to rural people, etc. but we can see some are happy while others are not. It is being said by critics that this step was taken only to bolster the image of the Prime Minister as he has been unable to deliver on GDP growth, inflation and bringing the black money from abroad.The stock of the black economy constitutes a major part of the GDP is significant. Even if 50% of this amount is withdrawn, the kind of relief that RBI will get on its liabilities and the sort of deposits commercial banks will get will lead to a rise in the deposit and later on there will be decrease in lending rates plus fiscal deficit. The black money in circulation is like a steroid in the economy which keeps the demand going gives a feeling that everything is working well.
DEMONETISATION
It is a radical financial step in which a currency unit's status as a legal tender is declared invalid. This move is usually executed when old currencies have to be replaced by new one's or whenever there is a change of national currency. However, given the extent to which the project has to be executed, the move has to be well planned in advance. It first happened in 1946 when the Reserve Bank of India demonetised the then circulated Rs 1,000 and Rs 10,000 notes. Higher denomination banknotes in Rs 1,000, Rs 5,000 and Rs 10,000 were introduced eight years later in the year 1954. These very notes were again demonetised by the Morraji Desai government in 1978. The demonetization move of 1978 too was made to tackle the black money economy. In the year 1978, the Indian government demonetised Rs 1,000, Rs 5,000 and Rs 10,000 notes, which were quite substantial.

IMPACT OF DEMONETISATION
• It will reduce the black money which is in the form of currency and hoard to some extend may be to the tune of 3 lakh crore
• It will stabilize banks by capital inflows as required under Basel III norms, which the Govt is unable to provide more than Rs 70,000 corers as provided in Budget
• Reduce the money flows to terrorism and drug traffickers thus controlling crime
• Reduce the Fiscal deficit and thereby reducing payment of interests to the loans taken under deficits financing
• Prevent Pvt money lenders to provide loans to Rural people at huge rate of interest
• In the long run India will have a sustains Growth rate for along time and will be major world economic power to reduce poverty and increase standard of living
• Transparency- It will bring more transparency in the long run (cashless economy). Since circulation in counterfeit currency will see the end soon

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Krishna Dhoot on Thu Nov 24, 2016 7:02 pm

There's a saying: "The road to Hell is paved with good intentions" Now, that doesn't mean that everyone who fails even with good intentions is going to hell. It merely means that sometimes intention isn't good enough. However it can be possible that intentions would have some bad effect but ultimately it is the result that matters.
Lets talk about this phrase in the context of Demonetisation. The legal tender of Rs. 500 and Rs. 1000 now becomes illegal tender. The whole economy gets affected through this decision made by our Prime Minister, Narendra Modi Ji. The main reason behind this step is that this was important to remove corruption from India, to tackle black money in the economy and for the betterment of the society. So, the intention of Modi ji is very much clear and right but it has some bad affect in the whole country. So the above phrase is completely understood by the demonetisation.
Troubles of Demonetisation are as follows:-
1. Foreign tourists facing problems due to lack of awareness.
2. Domestic tourists also faced problems.
3. Lack of money in the economy, restricting various transactions.
4. Rural area people still dosen't have any bank account so they are facing problems for daily transactions.
5. People have to stand in long queues in banks to exchange their money or to deposit or withdraw some money.

Impact of this demonetisation in the economy would be as follows:-
1. Deposit in the short term may rise, but in the long term, its effect will come down.
2. India risks its position of being the fastest growing largest economy: reduced consumption, income, investment etc. may reduce India’s GDP growth as the liquidity impact itself may last three -four months.
3. The real impact will be on counterfeit/fake currency as its circulation will be checked after this exercise.
4. The major impact would be on the people having their black money in the form of cash.
5. A lot of money that operates in the shadowy economy will now become part of the banking structure and banks will have a lot more money to support the economy.



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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Shubham Mathur on Thu Nov 24, 2016 8:38 pm

Yes, Good Intentions matters whether or not outcome going to be good or bad. As because everybody expects the outcome of the decision made and if the outcome of decision fails to achieve its desired objective then it broke the positive expectations of the people.So it matters somehow. As in the case of demonetization, although our Honorable Prime Minister has taken the decision of demonetization but the effect would be seen in the near future. Well, everybody expects the positive outcome but no one can give guarantee for the better economy in future. But today, due to demonetization, people are suffering a lot of trouble to exchange their notes but at the same time, it leads to bad decision for the parallel economy as it deceases their value of money.But I would share some positive impact of demonetization
1) Demonetization will boost deposit base and economy. The parallel economy as per World Bank report is 23% in 2007. It is estimated that Rs.4500 billion are in unaccounted economy. If this economy come into banking, it will boost the deposits and financial savings . It is expected to increase the savings by 0.5 to 1.5% of GDP. This is mainly due to switch of savings from unproductive physical assets to financial assets.
2)Demonetization will improve monetary transmission and blending rates. Higher rates of current accounts and savings account because of higher deposits will enable banks to lower the cost of funds. The lending rates will be reduced by 125 bps over the next six months.
3)The marginal cost of lending rate will take into account the lower cost and reduce its lending rate. This will lead to boost in economic activity in medium term.
4)Demonetization will crate further monetary accommodation. RBI has acquired a greater room for easing monetary policy because of improved monetary transmission, economic efficiency, structural moderation in currency circulation.
5)The move by the government to demonetize the currency will give a push to cash deposits of accounts under Jan Dan Yojana, 43% of which has so far remained dormant. The c share of the Jan Dan Yojana accounts in total banking system has remained nude 1%. Demonetization will make Jan Dan Yojana scheme an inclusive one.
The present demonetization troubles as the problem everyone is facing right now is lack of money to exchange for the balance of amount you had paid.

From Nov 8 onwards no business organisation or shops expect hospitals and some government offices and petrol pumps(allowed for a short period of time)are given the permission to collect 1000rs and old 500rs notes as it was banned.If they are collecting these banned notes,then it would be considered as black money(without source) when they are submitting the income reports to income tax. As people are receiving only 2000rs from banks in exchange of their old money,they are not able to pay the balance amount if a person made a purchase of 1000rs, then there is no money to pay back the balance 1000rs(either the shopkeeper will run out of 100rs notes or lower dimension notes). The shopkeeper will have no other option other than to cancel the purchase and at the same time the buyer will not be able to get the products he need. This is happening all over India from hotels to medical shops, from hospitals to bus depot's.

In a broad sense all you get from the bank is 2000rs notes and you won't be able to eat a meal from a hotel as they won't have the change to pay you back(unless you are going to some 5 star hotels).

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Mubarak on Thu Nov 24, 2016 8:54 pm

On November 8, Indian Prime Minister Narendra Modi announced in a broadcast to the nation that Rs500  and Rs1,000 currency notes would no longer be recognized legally as currency. “Great,” said Corporate India, economic commentators, foreign investors, international think tanks and global rating agencies. “Masterstroke,” echoed the Confederation of Indian Industry (CII).

The aim behind the government’s action was to combat tax cheating, counterfeiting and corruption. Eliminating large denominations makes it harder to hide large amounts of cash. Modi noted that the move complements the country’s swachh bharat abhiyan (Clean India campaign). “For years, this country has felt that corruption, black money and terrorism are festering sores, holding us back in the race towards development,” he said. “To break the grip of corruption and black money, we have decided that the currency notes presently in use will no longer be legal tender from midnight tonight.

The move to demonetize Rs 500 and Rs 1,000 currency tenders by the union government of India on last Tuesday, was a laudable and historic effort to clean up the decades long corruption and black money. As Indian citizens, we all should be proud of the fact that we elected a government, which was capable of taking such brave decision for the long-term betterment of the country’s economy. Nevertheless, there’s a high possibility that a certain percentage of people might interpret this decision negatively in view of the fact that short-lived challenges are to be seen, which might have a profound negative impact and dethrone ruling party in the coming elections; not everyone happens to be cognizant of the decision’s long-term benefits. If unaccounted or black money isn’t obliterated, it would make the rich richer and the poor poorer. According to SBI, “ Banks received deposits worth Rs 53,000 crore since the government put out of circulation, high-value banknotes in a bid to drain illegal wealth. Nearly 14 lakh crore are held in Rs 500 and Rs 1000 notes now – nearly 86% of the total value of currencies of all denominations in circulation” . Ultimately, government will possess an adequate amount of money to invest in infrastructure, education, agriculture, and all other sectors to build India economically stronger.

What Troubles Present Demonetization?
   Poor people like farmers, daily workers, travellers, old people, people on medicine etc are the one who are suffering the most, as most of them either are not having a bank account or are finding hard to get work, or even are facing the difficulties in getting the change amount.
Even that to, every common man is facing the problem in term of getting the cash from the banks or even from the ATM’s as the govt. lacks the proper planning before implementing this particular demonetisation. several ATM's across the nation continue to be useless because of not having enough fresh notes.shortage of Rs 100 notes because of improper planning. New Rs 2000 note is useless for daily or day to day transactions.

IMPACT of This demonetization?
        every honest taxpayer should hail this decision. In the present economical situation, black money has inflated prices in real estate, gold and a few other sectors, making it a challenge for a common Indian citizen to invest. However the government’s attempt to curb black money will significantly lower the prices in such sectors. According to Finance ministry’s report in 2012, “real-estate accounts for more than 50 per cent of the current black money market” . Demonetization would not only repair internal economic issues, but also tackles funding to terrorism. Counterfeit money is one of the main sources of funding for activities related to terrorism . Also, corrupted government officials and politicians who have earned in illegal ways will have no other option to put that money into usage and Agriculture is impacted through the input-output channels as well as price and output feedback effects. Sale, transport, marketing and distribution of ready produce to wholesale centres or mandis, is dominantly cash-dependent. Disruptions, breaks in the supply chains feedback to farmers as sales fall, increased wastage of perishables, lower revenues that show up as trade dues instead of cash in hand and when credited into bank accounts with limited access affect the sector.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Karishma kedia on Thu Nov 24, 2016 9:40 pm

In my opinion, It depends on us. Good or bad outcome, we must live with the truth of our intention.
Most people feel much better about things turning out well in spite of beginning with bad, less than good, or even harmful intentions and plans. And, less so when things don't sort themselves out so well.
Getting caught or not getting caught is less important than being able to be truthful with ourselves.


On November 8, our Honorable Prime Minister Mr. Narendra Modi announced in a broadcast to the nation that Rs500 and Rs1,000 currency notes would no longer be recognized legally as currency. The aim behind the government’s action was to combat tax cheating, counterfeiting and corruption. Eliminating large denominations makes it harder to hide large amounts of cash. This announcement appears to be the most significant change made by the Modi government to date,” says Girish Vanvari, partner and head (tax), KPMG in India. Its impact could be even bigger than GST (the Goods and Services Tax which is still running the gauntlet of politicians). This move could change the face of the Indian economy, improve the government’s fiscal position and tax compliance. The size of the cash economy will shrink, as will black money generation avenues, because of the better cash-flow trail. India is a cash economy; almost everyone keeps a few Rs500 notes. Lines began forming in front of ATMs and banks which could exchange old notes for new. A mere exchange — a new Rs500 for an old Rs500 — was not enough; there was also a limit imposed on how much one could exchange or withdraw from their accounts. In some cases, there were altercations as people waited for hours. Gas pumps and hospitals (which were allowed to accept old notes) saw a boom in business. People also wanted smaller currency notes to serve their daily needs. A loaf of bread costs Rs25. No shopkeeper would give change for Rs500.

Impacts of Demonetization:
i. It would help enhance the tax base going forward and help reduce the fiscal deficit. However, at the same time, revenue growth is likely to be negatively affected as a result of slower growth.
ii. In the short term, there will be an increase in bank deposits as individuals deposit their high-denomination notes, bringing down yields. This may, however, not sustain as people may have a desire to hold and move back to cash in the new high-denomination notes that will become available over time.
iii. Demonetization will crate further monetary accommodation. RBI has acquired a greater room for easing monetary policy because of improved monetary transmission, economic efficiency, structural moderation in currency circulation.

Troubles of present demonetization:
  I.For sectors like real estate, a notorious hotbed for black money transactions, there will likely be dis-inflationary pressures short term, with prices being pushed downward before they stabilize longer term.” Real estate shares have plunged, in some cases by more than 30%.
II. Demonetization will place a temporary brake on illegal transactions in cash until operators figure out alternative ways of financing such transactions. The U.S. dollar and pound sterling obtained from the local black markets is one such way. This shift will drive up the dollar in the black market and increase the spread with the official rate, which will in turn put pressure on the official rate to depreciate.
III.Rural and semi-rural citizens in India are very cash dependent; lots of people depend on and regularly use cash for their transaction. Fewer than 20% of India’s approximately 2,15,000  ATMs for instance are in rural Centre’s. So any idea of moving to cashless transactions any time soon is a pipe dream. Unfortunately many commentators live and work in rural areas and they can buy even 100 Rs worth of vegetables in a local supermarket and pay by credit card. Less than 5% of Indians have a credit card. In April 2015 there were only 21 million credit cards.
 
IV.A huge swathe of economic activity will therefore be disrupted. Everything from marriages, funerals, festivals, purchases of essential goods, discretionary household consumption will be postponed and or cancelled.


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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Neha Choudhary on Thu Nov 24, 2016 9:41 pm

Yes good intentions do matter not necessarily it may lead to good outcomes at same point of time but it might be a good decision for long run.The Narendra Modi government shook the country by announcing demonetization policy and turning notes of 500 and 1000 as paper.The step of demonetization was taken against the black money,corruption and terror financing that would benefit the worst of Indian society.Though at this point of time people are facing problems as they have to stand for hours waiting for their turn to withdraw money for themselves and even the different sectors have been affected due to demonetization whether they are tourism industry or FMCG  all are facing the after affects of demonetization , talking about tourism , no. of individual traveller have been declined by 40% while even the hotel booking have also been cancelled as it is a peak tourist season the step of demonetization have impacted it as foreigners are also complaining about difficulty in getting their money exchanged, this currency crises has also hit the tourism season hard. FMCG companies have started cutting up their production by upto 20% as sales have slopped down significantly in the aftermath of demonetization.
The impact of demonetization-
As the India's nominal GDP is about Rs 135 trillion one expects that about 80% of the unaccounted income would be invested in domestic or foreign asset, which are dealt through separate policies. Since the banking habits of people may not change overnight,the remaining amount of scrapped currency notes will either be exchanged or withdrawn from bank as soon as possible to restore normalcy in currency circulation for genuine economic activities.the additional deposit in banks will depress deposit and lending rates and improve monetary policy transmission.Given the slack in the economy capacity utilization at 71% is one of the lowest in the past two decades-the hesitant recovery in private investment and the crackdown on black money generating sectors like real estate and gold , credit pick up may not be commensurate with the deposit growth.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by REEMA SHARMA on Thu Nov 24, 2016 10:49 pm

Yes I feel that good intentions matter a lot because it might be possible that in short run it may lead to some bad outcomes but in long run they will surely lead to some positive outcomes. This is possible because good intentions are always backed by some problems and issues and these intentions are formed by analyzing the solutions for these issues.
For example if we talk about the demonetization practice which is spreading like a fire in the country. Everyone is feeling that this activity is like a biggest source of disturbance in their lives. This is the reason that everyone is blaming the prime minister for this disturbance in their lives. But nobody could actually realize the motive and good intentions of Narendra Modi. The major objective of our leade was to remove the corruption from the country.
Various impacts of this demonetization policy are :
               Positive impacts-
-The black money related illegal activities will be vanished from the country which will result in reduction of corruption from the country.
-It will lead to the development of digital country by introducing the advantages of plastic money and online transactions.
-Real estates related transactions will be benifitted.
-Overall economy of the country will boost up.

Negative impacts-
-The rural and uneducated people are facing many problems in online transactions.
-Many problems are faced by regular users and the households
-Share market is affected badly.
-Corporate sector is also facing many problems
-System of exchange in various banks is also acting as a big problem.

Overall it can be concluded that no doubt these good intentions are resulting in some bad effects but people should realize that these small and short term troubles will not even be remembered by them, when they will be enjoying the benefits of this practice in their own nation.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by BHARAT JAIN on Fri Nov 25, 2016 12:34 am

If you are in a position where a decision taken by you will affect the whole economy, then you always think for the future rather than rely on the present.
As a Prime Minister Mr. Narendra Modi took a very crucial step to change the higher value currency and I appreciate this. As we see that the corruption, Black money, Terrorism, illegal activities and duplicate currencies are increasing continuously, people are storing cash in their places, to save themselves from tax liabilities, that’s why government took this step to change the higher denomination currency of Rs.500 and Rs.1000 so that people come out and government knows the storage of cash of an individual (if they do not want to show then the Rs.500 and Rs.1000 notes are treated as a piece of paper i.e., their face value will be treated as “Zero”).
Demonetization”, the word itself defines the current situation of an Indian people.
Seriously that was an unforgettable day when our Hon'ble PM Mr. Narendra Modi announced at 8PM that the Rs.500 and Rs.1000 notes after 12PM were not treated as legal and the people were running here and there like a hell. People were standing in a long queue to deposit their cash in “cash deposit machines”. From that day till now people are daily going to bank to deposit old or collect new currency. On the other side, our Indian comedians creating funniest trolls to make everyone’s laugh.
Our “PM” played his trump card and shows his power to the whole world and all the political parties.
“Trouble due to Demonetization”
·Farmer, who are living far away from Urban areas getting a problem to travel a long distance to change their currency and  due to this their productive labor hours were decreases.
· Those families whose member are admitted in hospitals are also facing the problem of cash shortage because they have not   money to buy medicines and other basic necessities for the patient.
·  This is a time of marriages (season of marriages), where the family is going to spend money to make the days memorable.
  In Indian culture, it's like a tradition that, we have to give money directly or indirectly to the boy’s family (in term of dowry   or for the future life of their daughter, in love). For this they want money.
·  Our Indian people are so smart, that they are now making fools of those illiterate people who are not       aware of the Demonetization, for example, people bought peanuts from a street seller in good quantity     and give them Rs.500 so they get to change and the poor man after knowing that running here and           there.
· People who are daily wages earners are now getting unemployed because the people who are hiring them jobs have not         money to pay them, so they decided to stop giving work.
·  Buyers who buy the product in large quantity are stopped because of a shortage of new currency.
  For Example, one of the wholesaler in Mumbai said that now the buyer first calls them before coming and ask them     that they are accepting Rs.500 and Rs.1000 notes or not.
· People are not having money in their pocket to spend, they have to restrict their expenses due to this other sectors get        affected (no sale & purchase in the market).
“IMPACT OF DEMONETIZATION ON INDIAN ECONOMY” 

  • With new currency, the government gets to know the actual worth position of the individuals.
  •  Now we can say that there will be a control on corruption, Black money, etc., but not 100%.
  • It will create a Digital Market (Digital Environment).
  •  There will be an increase in the “TAX REVENUE”.
  • Our Indian government has sufficient amount of new currency to meet the requirement of all, but the problem is that they do not have enough ATM machines which insert new currencies, due to this people are standing in a line in front of ATM machines for getting cash. (the limit for one card is Rs.2500, so they are utilising the limit of all the cards which they carry, due to this people will stand for longer hours).
  • Online payments sites like Paytm are in boom, that the people are using it like a “Virtual Money”

(Around 83% of cash in market is in the terms of Rs.500 and Rs.1000 notes)
Ø  Before Demonetization, our government started a “Pradhan Mantri Dhan Jan Yogna”, in which anyone can open his/her Bank account only showing their AADHAAR CARD, at that time 25 cores account were get opened with not as such huge deposits.
Ø  But after Demonetization, those people suddenly got money deposits in their bank up to the exempted Tax limit of amount Rs.240000.
Ø  Rs.21000 crores deposited in these accounts in the first fortnight since Demonetisation.
The simple question is that from where these people get money and from where they got to know the rules and regulation.
“”In last, I only to say the even though there are some bad outcomes, but the decision taken by our PRIME MINISTER is the best decision ever taken by any of our former Minister. Definitely, it will give a huge benefit to the economy, after few weeks when the situation gets in control””.
 

“People are saying that even though we are facing some problem, but the decision was taken is the best decision ever”.


Last edited by BHARAT JAIN on Sat Nov 26, 2016 8:22 pm; edited 1 time in total

BHARAT JAIN

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Varshita Rathore on Fri Nov 25, 2016 7:46 am

Good intentions always matter.

When talking about demonetization, the step taken by the government of India on November 8th 2016 to make 500 and 1000 banknotes illegal and ceasing the use of it, its outcome can be said troublesome or disruptive but its outcome is not negative. Our PM Mr. Narendra Modi has taken this initiative to fight against the problem of black money which is clutching our nation badly. It was announced by him in an unscheduled live television address that use of 500 and 1000 banknotes is invalid from midnight from the same day giving no time to black money holders to find any loophole in this order.  But when we have a glance at the present scenario the conditions of common mam is very bad. Businesses have gone under losses as the sales have gone down. People are not having sufficient cash which government has made acceptable. As a result people are standing in queues on a daily basis for multiple hours for getting their cash withdrawn or exchanged. The rural poor have been hit the most by this decision. Those rural people who doesn’t have a bank account are in the greatest dilemma that from where to solve this problem.

It’s true that no one can defend black money now. Heavy penalties are imposed and the government is trying to take every possible step not to spare even a single strand of opportunity to people possessing black money, which is again an appreciable job.

No doubt our PM has worked over this for the welfare of our nation, but along with it are also associated some problems/troubles regarding demonetization.

• ATMs are having shortage of banknotes.
• People are facing trouble in exchanging their currencies.
• Rural people not having bank accounts are clueless how to cope up from this situation.
• Shortage of 100 rupees banknote because of mismanagement of its printing.
• People have to wait daily in long queues for multiple hours to withdraw cash or make their old invalid banknotes exchanged.


IMPACT:
• The most serious impact is the liquidity which deflated due to the lack of money possessions with people. It is a short term effect. This liquidity crisis or credit crunch results in short supply in cash and demand is very high.

Impact on Black money: This is the main reason of the demonetization project and to a very good extends this project is able to live up to the expectations of the people introducing this.

People investing in Gold: Due to this initiative taken, people are taking undivided attention towards the purchase of gold as a remedy to their black money problem, which is also not 100% helpful in making black money white.

Lesser tax rates: It will tend to reduce the tax rates as the funds of the government now cannot be made black and people will now try to engage themselves in paying tax specially those who were avoiding this practice till now.

Economic growth: Demonetizing is not having a scope of small run. In long run it will definitely increase the growth rate and there will be a shift of black money to white.

Cash-less Economy: With creating a limit to withdraw Rs. 2500 per day and Rs. 24000 per week will shift the Indian economy towards online payments and PayTM, i.e. making the nation move one step towards development.

• It will lead to Transparency as most of the people will shift their interest to online payments.

Impact on Stock Market: With the effect of demonetization, i.e. almost no liquidity the purchases had gone down which cost the stock market with a loss of 1300 points as all of the investors are withdrawing their money back.

Rich and poor on the same pace: With the effect of this the rich and poor will share common grounds of the nation and basic amenities provided by the government.

Funding to terrorist and other unethical activities will stop: With the elimination of black money it will simultaneously tend to eliminate the funding terrorists and engagement in other unethical activities.

No Printing of fake currency: It will lead to breakage of the chain of fake currency supply from China.

Rise in the value of money: With the reduction in black money from the market it will definitely lead to increase in the value of Rupee in comparison of Dollar.

Check in the circulation in currency: With the effect of transparency there will be a constant check over the monetary usage in the country.

Hence, Demonetizing is an effective project undertaken for the elimination of black money. It may be inconvenient in short-run but will definitely yield good results in long-run.

Varshita Rathore

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by BHAVIKA AGARWAL on Fri Nov 25, 2016 2:37 pm

Yes,intentions matter a lot whether good or bad because intention is the root which give the positive or the negative outcome.
Now,talking in context of the Demonetization yes modi has started an initiative to do something really good.yes, it will take a lot as it is certainly going through years and to remove it completely or to some extent it will take time.
Talking about the present situation due to demonetization,yes it has several impact people are suffering a lot due to lack of money.Despite having there own money they have to suffer a lot and people are not able to complete their basic needs.Apart from that even when talking about withdrawing money from the ATM they have to stand in long queues and get money and that is only worth 2000/-.Shortage of money happening in banks and because of that the crowd is not able to survive somewhere but yes it is all short term.The pain is short term it will lead to biggest outcome.A country free from corruption.We have to come together and support and make our place a better one to live.

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Re: "Do good intentions matter if they lead to bad outcomes."

Post by Saurabh khandelwal on Fri Nov 25, 2016 3:46 pm

REMONETIZATION OF rs.500 NOTE AND DEMONETIZATION OF rs.1000 NOTE
Firstly, I want to thanks to our prime minister Mr. Narendra Modi for taking such a serious action towards the black money and corruption, that was the remarkable point in the history of Indian economy.
         I know this is not new for Indian economy but doing demonetization when your country's economy is booming with a good rate and almost currency of circulation is 86%, so it became very hard to take such an action. There was a quote in the economic times of 22nd November, 2016: -
        “Demonetization in a booming economy is like shooting tyres of a racing car”
Now let’s discuss on some points that why this scheme has been implemented and its impact on Indian economy: -
Why this scheme has been implemented?
Ans. The incidence of fake Indian currency notes in higher denominations has increased. According to the reports of RBI, 40% of currency was circulated in the market but there was 76% of rs. 500 note and 109% of rs. 1000 note circulated. They are being used by terrorists and hoarding black money. India remains a cash based economy. Hence the circulation of fake currency notes is a menace.
What are the impacts of this scheme on indian economy?
Ans. There are various impacts of demonetization on the various sectors of economy and they are as follows:-
1. Gold market:- It declines drastically after the demonetization because in india generally jewellers don’t used to give bills and they have no records of their income too that’s why this creates tension in the whole market so the whole market crashed.
2. Real state market :- it declines by near about 48% in two days after demonetization.
3. Digital wallet :- There is a very good boom have seen in digital wallet market. For an example  we can see paytm has a growth of 2031% in just 10-15 days and even they flexibilate their policies to transfer money from their wallet to bank account from 2% to 0%. Etc. etc.
                                 
 I want to conclude that this is a scheme with a very good intention by the ministry of finance under the guidance of our finance minister and our prime minister mr. Modi but some where I personally feel that the implementation could be better  but as  we all know the plan was to introduced it on 18th of November but due to certain reasons it implemented suddenly on 8th of November.
                   Yes it matters if your intentions are good but it results bad because some where it affects others  doesn’t matter either it is intentionally or unintentionally and  I am agree on this point also that we are facing and definitely we may face some problems in the upcoming time but it results with a great and dustfree country at last.

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Re: "Do good intentions matter if they lead to bad outcomes."

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