in his speech on November 8th Honorable PM Said that governance and progress for all is our motto. We are focused on empowerment of the poor. A series of schemes we have introduced all aim at this. This is a government for our farmers, We are among fastest-growing economies, but we also rank so high in global corruption rankings.
these following troubles arises in Present Demonetization :
1) preparedness of the government and the banks regarding this big move.
2) There is huge shortage of Rs 100 notes because of poor planning system
3) The latest Rs. 2000 single note is hard to use in routine day transactions
4) Everyday people are standing in long queues to get or exchange their money
5) Rural areas & labor class people getting the most trouble
6) Foreign visitors are facing loads of troubles
According to our government 88 billion dollars of old notes have been deposited in banks since the ban was called, and that new 500 and 2,000-rupee notes are being rushed every day to banks, where the snaking lines of last week have now substantially decreased. But it is rural India where people have been hit especially hard. With limited or no access to banks and at a time when farmers are sowing their winter crop, the shortage of cash has the potential to turn into a crisis. The government has announced urgent measures to help farmers, like allocating 21,000 cores to state-lender NABARD to dispense as loans
However it has major positive Impacts of Demonetization
1) It will have a significant impact on black money (or I would say so called parallel economy) and corruption and will help pivot the world’s largest democracy into a digital economy
2) It will increase the user base and help drive higher financial inclusion across a broader section of the society including the lower income segment
3) There will be a huge rise in small transactions made via digital wallets and online payments such as for auto, cab rides, petrol , grocery, etc, this move will accelerate the adoption of digital payments for such services by individuals as well as shopkeepers & SMEs
4) Agriculture sector will get a big boost in economy of India
Conclusion: I would have heralded this demonetization move as a master-stroke move, were this move been announced purely as a measure to curb counterfeiting and Curbing black money by introducing currency of higher denomination is counter intuitive as it only helps in simplifying hoarding of black money by replacing currencies of lower denominations with that of higher ones and Meanwhile, people are running low on cash, hoarding cash, many have stopped discretionary spending, small cash based businesses and the poor are suffering and an enormous amount of time but it’s just a matter of time and if we will cooperate with our government in this crucial time a shining bright corruption free future awaits for us.
Last edited by rohit shivran on Fri Nov 25, 2016 5:00 pm; edited 1 time in total
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Join date : 2016-07-19
Age : 22
Location : JAIPUR
Prime minister of India Shri Narendra Modi has announced that Rupees 500 and Rupees 1000 currency will be discontinued from 8th November 2016.
What is the action taken?
Rs. 500 & 1000 currency notes will be banned from 09 Nov, 2016.
Banks and post offices will remain closed on 09 Nov, 2016. And from 10 Nov onwards Rs. 500 and 1000 notes can be returned in banks/post offices.
Documents required while asking for exchange is ID proof like PAN card, Aadhaar card, election card from 10 Nov – 24 Nov. Daily exchange limit is capped at Rs. 4000.
Rs. 2000 currency notes will be available and it will bear image of Mangalyan launch.
New notes of Rs. 500 will also be available for usage by Indian government.
Maximum Rs. 20000 can be exchanged from bank in a week of Rs. 500 & 1000 notes.
There is a cap of daily exchange of Rs. 10000 from bank in return of Rs. 500 & 1000 notes.
withdrawal should not be more than Rs. 2500 per day from ATM.
1. Shortage of Rs. 100 notes will increase
2. Rise in plastic money like debit card, credit card, online transactions.
3. Those who do not have debit/credit card, online payment services such as internet banking will have to bear some pain.
4. Rupee will strengthen as the time passes. Inflation will go down which will benefit poor and middle class people.
5. Share market is likely to see the impact because of this decision. Stock prices will shoot higher
6. Investments in gold and jewelries will increase as trust on currency will go down. More people will try to convert paper into gold. It will eventually increase investment in the government’s gold monetization scheme.
7. More and more businesses will be organized those who accept paper money only such as small jewelers, hotels etc.
8. Those who have limited currency note of lower denomination will have to face trouble while purchasing items like vegetables, groceries, and others.
9. New opportunities will open up for poor and middle class people.
10. Reach of real estate, education and health care will expand.
11. Funding for arms, smuggling, terrorism will take a blow. This is most important advantage to the country.
12. Circulation of counterfeit currency will see the end soon.
13. Since ATM withdrawal will have limit, it will result in additional charges for those who use it multiple times.
14. Although the decision is in the favor of the whole country, it might affect individuals/businesses who accept/use cash only. For e.g. if someone is getting married next week then cash transactions involving Rs. 500 & 1000 notes won’t be accepted. This might affect people and economy might get destablise for a while.
15. Abroad travelers who may not be visiting India in the near time might suffer.
How to return these notes:-
Individuals have been given a time to return the notes either at banks or post office before 31st December, 2016 (total of 50 days). Post that, if someone wants to return the notes, he/she can provide ID proof and submit the notes. But the last date for this would be March 31, 2016.
Where will these notes be accepted?
No. In some government hospitals and medical facilities these notes will be accepted till 11 Nov, 2016. They can also be used for booking bus, train & air tickets at the counters.
Even petrol and diesel station, CNG stations run by public sector companies will accept the notes for the next 72 hours.
Government recognized co-operative shops, kendriya bhandar, ration shops and diaries will accept the notes.
Those who are traveling abroad can exchange the old notes at international abroad. But cap is of Rs. 5000.
So from my point of view, this decision is very good but in the initial days i.e. from november and december month the problem might be faced by the citizens of the country.
- Posts : 16
Join date : 2016-07-20
The major objective of Demonetization is the eradication of black money from the economy of the country. While it has various positive impacts, here are some of the negative impacts which might result in the bad outcomes on the Indian economy:
People are facing a major fund crunch. The shortage of liquid cash has reached to the extent that the banks have at times refused to exchange the old currency of the common people. It has disturbed the regular lives of the people and brought discomfort of standing in long ques. It has also made the day to day transactions difficult due to lack of liquidity in the hands of people.
For the rural sector, it is very difficult to even comprehend the new system, let alone implement it. Most of their transactions are in paper currency and they are not in a habit of banking. While it is easy for the urban population to use paytm and plastic money, it is difficult for the rural population to survive initially.
Looking at the long term effects, due to the higher denomination of Rs.2000 instead of Rs.1000, corruption or other illegal habits might even raise.
Basically, nobody can stop the misdoings irrespective of how good the plans can be. What can be done is execute the plans in the best forum possible.
- Posts : 11
Join date : 2016-07-26
Talking about the present demonetization, I would like to throw some light on the figures of GDP given by Finance Ministry. According to their data, the GDP fall this year will be 5.5% in Q3 (oct-dec) quarter. This was about 7.2% in the same quarter last year. The projections given by world class economists were even darker, initially they said annual GDP will decline by 0.4%, but later on they said the annual GDP will decrease by 1-2%, and even 1% decline in the GDP means Rs. 1,50,000 gone. I am not saying that Mr. Narendra Modi had any wrong intentions, he was definitely right, but then demonetization brought along with it the bad outcomes. The GDP is continuously declining and everyday the finance ministry comes out with their new data. “Demonetization in booming economy is just like shooting tyre of racing car.”
Now if I talk about the troubles that demonetization brought along with it for the common man, everyone is facing the shortage of money. If I take the example from my own life, then being a hosteller even I am facing the same. It’s getting tougher day by day to withdraw cash from ATM. Before announcing to demonetize the currency there should be some provision for the recovery.
So, the harm or we can say the effect of demonetization if higher then the recovery rate.
Lastly I will just say, results are something which matters, intentions are not visible and hence hold the least value.
- Posts : 16
Join date : 2016-07-19
1. Shortage of Currency notes will hamper business Growth as people generally transact in cash and shortage of cash will make people to spend less and thereby growth will decline.
2. In rural areas people still don't have access to banks and other financial services so it is a gimmick for them to travel far-off places to exchange notes.
3. Due to lack of liquidity in the market demand for goods and services will increase and hereby results in inflation in the economy.
4. Also the medical services provided in private hospitals are worst affected because people suffering from acute diseases are not in a position to afford treatment.
5. It will not affect the production of counterfeit currency in long run because people producing fake currency can also copy the new currency so demonetization will not affect the production of fake currency.
6. Also government move to issue Rs. 2000 currency note will lead to increase in unaccounted money because it is easier to store black or tainted money in larger denomination notes.
7. Farmers and people engaged in agriculture, transportation services etc where most of the business is done with paper money are in a major problem because of non fulfillment of working capital requirements.
8. General public has to bear some discomforts as they are waiting in long queues to get their own hard earned money.
9. Foreigners are also affected as due to lack of cash they are unable to get exchange of their currency and hence we may see a decline in tourism industry in the near future.
But all these negative impacts will be neutralized in long run when the people will start to witness pros of demonetization.
Last edited by shubham.khurana on Fri Nov 25, 2016 6:29 pm; edited 1 time in total
- Posts : 7
Join date : 2016-08-09
it 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.it is basically done to combat black money and to clean the economy of the nation.
In 1946, demonetization was resorted to but the Direct Taxes Enquiry Committee in its interim report observed, “Demonetization was not successful then, because only a very small proportion of total notes in circulation were demonetized in 1946 and its worth was Rs.1,235.93 crores.” On January 16, 1978 demonetization of high demonetization notes was introduced. The high demonetization rates as on that day amounted to Rs. 146 crores. Notes tendered to Reserve Bank of India amounted to Rs. 125 crores.
Impact of demonetization:
1 black money
2 terror funding
3 temporary chaos and confusion
4 encouraging digital payments
5 impact on real estate.
Now talking about the intentions according to me it's the thought that counts. surely right now we are facing problems and the outcomes look bad but eventually it will turn out to be a bold and a successful step that is taken by the Indian government. As the intention was good and was necessary to get rid of parallel economy and will promote the digital money. the government has taken a huge step in stopping the currency and issue new notes, so just think once that to control a population of 125 crores and in order to come back to the normal situations once has to cope up with the short term inconvenience for having a good long term goal.
Even after lot of people speaking bad about the decision i am totally with the decision of our PM as this will eventually help in rising the economy of the country.
In the end i would like to conclude by saying that intentions does matter but if you can see the good results coming out of it then you must have patience to cope up with the current situations.
- Posts : 11
Join date : 2016-08-06
What truly matters and is appreciated is trying to take a step towards betterment of oneself and others, that step resulting in having a negative impact due to unforeseeable force or reason is different. Not trying because of the fear of failing is the actual loss.
Demonetization in current scenario is very much related to this line. But the only difference is that it is too early to say that whether it will lead to a bad outcome or not.
“Demonetization is the act of stripping a currency unit of its status as legal tender.” In this process old currency is retired to be replaced by new currency. Similar thing took in India where notes of 500 are re-monetized and 1000 Rs notes are demonetized.
Every Coin has two sides and every step taken has its own pros and cons. Till date there is no single action which doesn’t carry any negative point.
Both Positive and negative impact of demonetization are discussed below:
1) It will lead to cashless economy, though it is good as there will be transparency but it will also result in liquidity problem. Maximum vendors in our society are not equipped to accept cards which will be problem for both buyer and sellers at least for transition period.
2) Having black money will become really difficult for everyone. It will help our economy to grow as maximum black money will be revealed or destroyed.
3) Presently it has resulted in having a negative impact on the stock market as people don’t have liquid cash and are busy withdrawing their money from stock market.
4) One more positive impact is that it has resulted in the destruction of fake currency.
5) It will become reduce terrorists’ activities as it will be difficult to fund them without fake currency.
6) Real estate prices will drop as the black money component or the money earned by selling property but not shown on papers will have to be revealed.
7) Many parties for their 2017 election will have remake their campaign as maximum funding done through cash donations will not be received.
8 ) India is moving towards digital payments.
9) Though it has created confusion and chaos but it is not for temporary period and soon when circulation will increase it will be back to normal.
10) Purchase of gold was significant in the initial days after the announcement was made.
11) It is expected to have a negative impact on the inflation as consumer spending had gone down significantly.
I would like to conclude by saying that our Prime Minister, Mr. Narendra Modi had good intentions behind it but its actual impact can only be known with time.
- Posts : 12
Join date : 2016-07-20
Troubles due to demonetisation:-
1. shortage of money in banks & Atms
2. people are standing in queues in bank and Atm for exchange their currency
3. smaller farmers, sellers, merchants, daily wage labourers are suffreing of lack of planning
Impact of demonetisation:-
1.corruption will vanish
2.value of money will increase in international market
3.digitial transcation will increase
4. Demonetisation hit the whole country and the real sector is one of them.
- Posts : 11
Join date : 2016-07-30
What troubles present demonetization?
1. Although the target for this move was black money holders, the real people getting crushed are labourers, maids, farmers who do not have access to any accounts.
2. Cash is the least preferred method of holding of black money. Most of it exists in gold, assets and in form of other instruments that makes it hard to detect.
3. With people having no legal tender, most shops and outlets are running with zero footfalls.
4. We can see the enormously long queues in front of banks and ATMs. Although the government has mentioned that hospitals and gas stations are supposed to accept the old currencies, they are not ready to do that and people who are admitted in hospitals and who had already planned journeys are suffering. Deaths have been reported from various parts of the country.
5. By introducing currencies of value 2000, it makes it easier for the lawbreakers to transport large sum of money since it requires half the effort of transporting the same in 1000s.
Impacts of demonetization
Prime Minister has explained why this is a financial surgical strike. It was meant to be suddenly implemented. In the past, demonetization has taken place twice but it fails because the idea is to tackle the black money existing in circulation. If announcement and time would have been given, this step might not have been successful in controlling black money.
1. 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.
2. The demonetization decision is expected to have far reaching effects on real estate. Resale transactions in the real estate sector often have cash component. Black money was responsible for sharp appreciation of properties in metros; real estate prices may now see a sharp drop.
3. The gradual transition towards digitization and a cashless economy will definitely help curb corruption in the long run. The increased transparency and record of transactions will make it considerably difficult to hold black money and carry out under-the-table deals.
4. We are likely to see some decline in inflationary pressures as demand along with household inflation expectations are likely to go down. This would make the RBI more comfortable on managing inflation in the future increasing the possibility of rate cuts in the future.
5. As people are depositing their black money in the banks they are paying taxes to the government which will lead to increase in government savings. The government can use these savings for further investments (government spending) and hence increase in GDP.
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.
- Posts : 15
Join date : 2016-07-26
Few years back in 1970’s this type of step was taken by the PM of that time Morarji Desai.. he has taken the step of changing the 1000 note currency ,by that there was also lots have changes have come in the economy(positive impacts). But before coming the positive changes there were many problems which are faced by the people of the country.
Just like that only if we talk about the recent scenario of demonitisation people are having problems like:
• The middle class person is mostly under pressure because whatever cash he is having is his pure white money, but due to this demonitisation and the tax rates which is to be applied in that his money will be treated as black money if he has more than 2.5lakhs of 500-1000 notes with him.
• All the business like jewellery,clothing and garments, cosmetics,travel agencies,hotels etc .. are bearing huge loses because of this demonitisation because people doesn’t have money to go anywhere or to purchase any thing.
• Normal person is not able to purchase its daily routine home items, and there most of the time is spending in standing in ques in the bank.
• Banks also are now saying that they have no new cash to give to the people.
Many new measures are been taken but they are all failed due to lack of new currency notes in the market. No tradings are being done in these days because of no transfer of money.All businesses are bearing huge losses due to this demonitisation.
Demonitization help the economy through the liquidity side, because nearly 86% of the currency value in circulation was withdrawn without replacing bulk of it.
Consumption will be hit as when liquidity shortages strikes it is consumption that will be adversely affected first.
India risks its position of being the fastest growing largest economy: reduced consumption: income investments etc.may reduce India’s GDP growth as the liquidity impact itself may last 3-4 months.
The real impact will be on fake currency as its circulation will be checked after this exercise.
Impact on bank deposits and intrest rates, deposit in the short term may rise, but in the long term , its effect will be come down. The savings with the bank are actually liquid cash people stored. It is difficult to assume that such ready cash once stored in their hands will be put into savings for long term. Most of the savings are obtained by biggie public sector banks like the SBI . they may reduce intrest rate in the short/medium term. But they can’t follow it in the long term.
At last I want to say is that, this it is the very well step taken by Narendra Modi for stopping this black money but somehow normal public is getting getting negatively impacted by this.. might be this is for a short term..
- Posts : 13
Join date : 2016-07-27
Demonetization is a act of vanishing old currency and replacing with the new currency or we can say which is not a legal tender.
Well according to the current case which is demonetization horunable prime minister Narendra Modi has taken a good step towards fighting on black money.Intentions are positive, people's are supporting him but the main problem is there is lack of implementation of his idea and this leads to bad outcomes for the economy.
Problems faced during implementing demonetization were:-
1)As we all know Rs2000 notes can't fill the transaction needs along with the too smaller denominations.
2)ATM recalibrations is a time consuming activity as new notes are being issued so these notes have to be in proper tray which is fit inside the ATM as the trays are design for old notes like Rs 500 and Rs1000.
3)Banks are unable to give cash to peoples.
4)Hundreds of people are lined up in front of banks to exchange and deposit their old notes which were banned from Nov8,2016.
5)There are three issues in which government has attempted to tackle are parallel economy,terror funding,and counterfeit currency in circulation.
6)Mosty small peoples,farmers and daily wage labourers are suffering because of lack of new currency.
Impact on Economy
1)Investment is going down as there is no cash flow in the economy but in upcoming months interest rate will be low.Hence,it will leads to more investment,more cash flow in the economy.
2)Real estate has the more impact in short term because of less transaction but in long term prices will be lower,people can buy more lands.
3)Talking about consumer goods sales are likely to be spurt in short term but in long term chances are more for retailers and wholesalers to increase their sales.
4)Automobile sector will be more effected due to demonetization as sales of luxury cars and 2-wheelers will decline.
5)Tourism sector will also decline in short term because of less cash as tourist will be suffered out of cash but in long term it might rise.
At last I would like to conclude that our prime minister has taken a good step to fight against corruption.In short term there will be a liquidity problem in the economy in long term the growth of economy will rise .We all have to support him in fighting against corruption.
- Posts : 14
Join date : 2016-07-26
Age : 21
Location : jaipur
As this has clearly stated the intention of our PM Mr. Narendra Modi. He took this big initiative just for the sake of our nation for our economic growth, just to turn our nation into "A Developed Nation". Though many people said that this was the wrong move taken by PM, this action is just like "shooting the tier of a fast moving CAR" where fast moving Car is our ECONOMY , this wasn't the right time for all this and so on. And this was also said that Mr. Narendra Modi will not be the PM in next election. After read this I recall one beautiful quote that "The road to Hell is paved with good intentions".
Trouble faced due to Demonetisation :-
• Long que outside the banks is a serious problem as working person are not able to stand for whole day for the exchange of money.
• Bank itself is not having sufficient amount of New Currency notes. ATM is of no use due to non availability of New Currency
• Students that come out of their places to another place for study are facing a serious problem as not everywhere online payment is acceptable.
• Businessmen from small towns are facing problem in accepting or paying money so in order to maintain good customer relation they are selling the stuff on credit basis.
• Foreigners are facing problems as they were not aware of such a big step so they are not getting money in small denomination and are facing problem everywhere because no one is agree to accept note of 500 and 1000.
• People of rural area are facing problem due to not having Bank Accounts.
• New note of Rs.2000. Is useless for daily and day to day transactions.
Impact of Demonetisation on Indian Economy.
• It affects the economy through its Liquidity side as due to the withdrawal of Rs.1000 note the only denomination remains before Rs. 2000 note is Rs.500 & Rs.100 which automatically pull down the value of 2000rs note. GDP will be impacted due to fall in consumption and it is estimated that GDP growth is likely to slow down around 6% in 2016-17
• Normal life will be effected badly. Most of the daily wages earner, labourer and small trader use cash frequently for all their transaction. So this action will loose there income due to the absence of liquid cash and cash stringency will also compel the firms to reduce the labour cost so ultimately it will result in reducing the income of Poor working class.
• This step prove fruitful for the online business but badly affect the offline businesses. Real estates price falls down, jems and jewelry business hit due to this declaration.
• From the political point of view All the parties join hand for this initiation. As Mr. Narendra Modi is highly appreciated by everyone so BJP will do reasonably well in Punjab and UP elections.
• If we talk about its social impact so first and foremost Impact is that All medicines will come in white money as maximum of black money was earned by Medical department.
The system of Dowry will be abolished and the marriage will become cheap.
It will also result in death of drugs mafia and terrors network.
• Tax Rates will come down as more people will come under Tax net and it will also give rise to our economy and FDI later on.
Conclusion :- As per my view this was the good initiative taken up by the Prime Minister. Every good thing have some wrong aspect in itself. If we think about Demonetisation it has some negative affect but have more positive thing which we will enjoy and feel after some time. Our PM is close to catch up all his promises that he made to us. This is his first move toward “Make in India”, a first move toward making a developed and clean nation in term of economy and corruption. Though every good initiation is always counter in our nation but I am wholly with this decision being an civilized citizen of my nation. Everything takes time to reach to its goal. Now I am feeling like nation is in good hand, now am feeling like someone is doing something for us for our nation, now am feeling like he is doing what he said i.e. "I will promise you that if you work for 13 hours I will work for 14 hours, if you work for 14 hours I will definately work for 15 hours because am not a PRADHAN MANTRI but I am a PRADHAN SEVAK" NAMO NAMAH.
- Posts : 19
Join date : 2016-08-03
After abruptly invalidating the 500 and 1000 rupee currency notes in India, Prime Minister Narendra Modi has tried to justify his action by saying that it was specifically for the poor and the middle class and that it will clean the entire system. The step was taken to eliminate fake currency and dodgy funds which have been used by terror groups to fund terrorism in India and to tackle with the black money in the economy.
Well, in support of his idea, I truly believe that he had great intentions in his mind with respect to the long term vision, but EXECUTION is as important as IMPLEMENTATION. However, there have been certain gaps that has lead to discomfort to the general public.
• Disruption in the daily routine, standing for hours to exchange or withdraw money from banks and ATMs.
• People who still do not have a bank account are the ones who are facing a lot of trouble during this course.
• The poor, the farmers and foreign tourists have been impacted.
• There has been a considerable decline in the real estate and gold market business because of the crises.
• The new Rs2000 note is a huge currency amount and is not largely accepted for daily,sundry transactions.
Although some temporary hardships are there, but efforts should have been made to alleviate suffering to common man. Some impacts of Demonetization are:
• Probable rise in the value of Indian Currency.
• It will lead to a more cashless economy which will result in transparency.
• Rise in the use of plastic money and online transactions.
• Inflation might drop in the coming times.
• Real estate prices will drop.
• It will cut down terror funding.
The fall in the economic activity due to demonetization can last for the next two to three quarters and as a result, GDP and GVA growth in these quarters can be significantly lower than the previous ones.
- Posts : 12
Join date : 2016-07-22
DEFINITION of '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
IMPACT OF DEMONETIZATION ON INDIAN ECONOMY
Liquidity crunch: liquidity crunch 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.
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.
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 ↓
FUTURE OF INDIAN ECONOMY DUE TO DEMONETIZAT
People disclosing their income by depositing money in their bank accounts government gets a good amount of tax revenue which can be used by the government towards the betterment of society by providing good infrastructure, hospitals, educational institutions, roads and many facilities for poor and needy sections of society.
Fake currency will stop circulating around the country
Illegal activities will stop like terrorism funding , money laundering.
- Posts : 12
Join date : 2016-08-04
a) For short term, it has negative impacts over India and its economy. Business will face short term loss due to this and citizens will be facing cash deficit to pay for goods and services.
b) For long term, demonetization will have good impacts. So wait for few time (may be weeks or months or years) to see the full impact of demonetization.
It is being anticipated that trades and businesses will adopt transactions other than those involving ready assets only. It is troubling to note that with total currency being the main medium for dealing, tax evasion and unlawful undertakings are proliferating.On the positive side, there is likely to a reset of spending patterns as this move represents indirectly a significant push towards a cashless economy. Businesses in the fin-tech sector, including payment banks, mobile wallets, electronic transfer providers, etc., are expected to see gains.
Demonetization will impact various sectors:
1) Black Money Hoarders: Those principle motivation behind behind this demonetization is will eradicate/ control bootleg money, with this move bootleg cash holders Possibly must indicate their money sour ball starting with which they earned their bootleg cash to the division alternately with smolder those stashed salary. Nonetheless kin declaring their pay over overabundance about edge limit will a chance to be subjected on investigation.
2) Rural Economy:People in rural India who have a significant amount of Rs.1000 and Rs.500 notes, but no official form of identification will have a tough time in exchanging their notes. Most of the rural population does not have even the slightest idea of banking. Hence this is likely to come across as a huge impact for such sections.
3) Domestic/ Household Sector:The logic behind this demonetization is to curb the use of these high value notes in the black money market. Now almost everyone has Rs 1000/500 notes so now it would become difficult for the common people to do their business/ household works easily.
- Posts : 11
Join date : 2016-08-09
500 rs. note. The intention behind this decision is as follow-
1. To control on black money
2. To stop the fake note
3. To boost the overall economy and etc.
But as we all saw that most of the people are suffering from this decision. They are standing in the queues for depositing or withdrawal of money. they don't have enough money for their basic needs and as per the newspapers and news channels few people are die because they are standing in a queue for a long time to deposit or withdrawal their money.
Surly PM modi did not think about these aspect. He took this decision for a good purpose but outcome is not as same he wants. But after 2 or 3 months situation will be change and it will be appeared as per PM Modi desire.
- Posts : 8
Join date : 2016-08-03
1.Government had taken a bold decision to demonetise the larger notes to curb black money but knowing the fact that indias economy which is NON CASHLESS and around 86% money in circulation impacting common citizen,traders,shopkeepers,daily wagers,transporters.government had to to take some steps before gong to take this jadgement-
2-Lower DENOMINATION OF MONEY should have been ensured by government in ATM for proper smoothning of economy.
3-Allowing the old legal tender at important places like MEDICAL COUNTER,HOSPITAL,PROVISION STORE,PETROL PUMP. and other BASIC AMENITIES,toll taxes ,COUNTER FROM WHERE FARMER TAKING SEEDS FOR KHARIF SEASON.
4-More cooperative FACILITIES FOR physically FRAGILE AND SENIOR CITIZENS TO exchange their older notes.
5-Governmenr should anticipated the huge CROWD after this major and bold decision and were have to arrange facilities at bank counter with good adhoc memebers for exchange.
6-strong security to control the crowd coming for their denomination.
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.
However, the steps taken by government to ease the effects of demonetization would help to reduce the inconvenience.
1) Withdrawal of money at selected petrol pumps
2) Extension of crop insurance premium
3) Admitting registered traders to withdraw upto 50,000 at mandis per week
And, in the long run, expansion of the banks, ATMS, Business correspondents, bank and digital literacy should be strengthene
impacts of demonitization:
Demonetisation to hit terrorism, drug and fake currency rackets
Demonetisation opposed by people who promoted chit-fund companies
Don’t get trapped by people who want you to deposit their money into your account
GDP growth is expected to be negative for around 6 months. However subsequent 2 years will see sharp “hockey stick” revival in growth.
Inflation is expected to fall sharply with fall in Real Estate prices and transaction costs thereof.
Government Deficit will see a huge windfall in the next 2 years.
Currency is expected to strengthen as inflation drops and economy gets a boost.
Banking System will get a boost, as around Rs 7-8 lakh crores base money (new legal money) will enter the system, which will further create around 3-4 times more money due to re-circulation.
Real Estate and Jewellery sectors, though battered initially will stabilize in the next 6 months.
Demonetisation to stop corruption in realty sector
Immediate impact is expected to be negative all round
In the short term it will be a logistical nightmare to manage the cash replacement in banks and smooth functioning of the banking system
Slowdown in consumer spending due to limited cash availability
Severe liquidity issues in cash based sectors like Real Estate and Jewellery
GDP will decline in the next 2 quarters due to reduction in overall spending
unorganised sector hits the most:
it has hit various sectors hardly. Unorganized sector is the most affected of all and more than 90% of workforce is placed in unorganized sector worsens the scenario.
1) Cash economy – Most of the transactions in this sector happens through cash, some even daily wages. Sudden liquidity crunch hit both employers and employers on merchandise and wages respectively
2) Bank and digital literacy- Most of the employers in the unorganized sector are illiterate; they are not tech-savvy and may not be completely aware of banking procedures. Also many unorganized jobs are in rural areas gives them less access t banks and ATMs
3) Future trade flow - No cash made them impossible to carry on buying products for next cycle of selling. This could be clearly evidenced in agriculture sector, where farmers are not able to buy seeds, fertilizers for rabi cycle.
- Posts : 10
Join date : 2016-07-27
Demonetization is a generation memorable experience and is going to be one of the economy events of our time. It's impact is felt by every citizen of India. demonetization affected the economy through the liquidity side. It's effect will be a telling one because nearly 86 per cent of currency value in circulation was withdrawn without replacing bulk of it.
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 distribs the economic activities.
BORROWERS CANT PAY MONEY BACK:
Some farmers and Small business say India's informal credit systems has ground to a virtual halt, despite government measure to steer more funds to them including 230 billion rupee's in crop loans.
Not only money lenders struggling to lend they are also struggling to get paid .
In surprise move intended to eliminate black money and the growing menace of counterfeits currency notes. Demonetization has generated many impact basically on business man , student's middle class people and whole economy.
The main purpose of launching this scheme was:
The incidences of fake Indian currency notes higher denomination has increased for ordinary person the fake notes look similar, even though no security features has been copied.
The fake notes used for intonational and illegal activity high denomination notes have been misused by terrorist and for hoarding black money. the action was intended to target wealthy tax evaders and end shadow economy but it has also exposed the dependency of poor Farmers and Small business on informal credit systems in country where half of population has to access to formal banking. It also hurt Indian economy as the informal sector account for 20 per cent of gross domestic and 80 per cent employment.
For Short term it may give negative impact to the people and maybe to the country but soon in long term it will be beneficial to whole country . demonetization will bring a good future to India in my perspective. We can call it as a long terms (long term plan by our pm) investment done by our prime minister .....by taking such decision...
Last edited by sunali on Fri Dec 02, 2016 10:47 pm; edited 1 time in total
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Join date : 2016-07-26
1) It will bring all the money into circulation and curbs the black money.
2) It will make way for increasing cashless transactions as it is problem to transact via cash in bulk at present.
3) It will clean up the electoral funding mess and money obtained via corrupt means.
But having said that, this sudden decision should have been taken with proper management so as to eliminate the problems that every Indian are facing now, particularly the common man of India.
When people are receiving only Rs 2000 from banks in exchange of their old money, they are not able to pay the balance amount. If a person makes a purchase of Rs 1000, then there is no money to pay back the balance Rs 1000. 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 needs. This is happening all over India from hotels to medical shops, from hospitals to bus depots.
Not more than 10 percent of Indian population know how to operate an ATM. Thus, there will be huge queues in the banks and people will have to apply leave to stand in those long queues.
Rural people not having bank accounts are clueless how to cope up from this situation.
Several ATM's across the nation are running out of cash and the ATM’s which are working, have long queues. Another problem is one can withdraw maximum of Rs 2500 per day. If a person needs more than Rs 2500, he won’t be able to withdraw his own money.
Emergency medical care is also likely to suffer. As per the scheme, government hospitals would accept these notes. However, many of these government hospitals ask to buy medicines from outside. How are those transactions to be settled? Also, over 80 percent of healthcare units are private hospitals and nursing homes. So what would happen to them!
• Bank deposits will spike
• On the way to cashless economy
• Real estate related transactions will be benefited.
• Overall economy of the country will boost up.
• Rise in the value of money
- Posts : 9
Join date : 2016-07-20
Impacts of Demonetization on Indian Economy:
• It will reduce the accumulation of black money in the hands of big and small businessmen.
• It will bring more transparency in the long run.
• GDP growth rate is being reduced by 6-7% due to demonetization.
• It will also impact terrorism due to lack of currency circulation in the market.
• Tourism will also get affected because of this ban as people are unaware of this and they are facing problem due to this.
• Normal households are also facing as there is lack of liquidation with them.
• People in rural India who have a significant amount of Rs.1000 and Rs.500 notes, but no official form of identification will have a tough time in exchanging their notes.
• Most of the rural population does not have even the slightest idea of banking. Hence this is likely to come across as a huge impact for such sections.
• As we know cash withdrawals limit from ATM and Banks is being restricted, this will lead to payment mechanism through online/card payment.
• Reduced inflation - Less currency in circulation will lead to lesser inflation.
•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.
•Housing prices in 42 major cities across India could drop by up to 30% over 6-12 months after the demonetization of high-value notes.
•Fake Indian Currency Notes (FICN) network will be dismantled by the demonetization measures. Taking out 500 and 1000 rupee notes out of circulation will have a lasting impact on the syndicates producing FICN's, thus affecting the funding of terror networks in Jammu and Kashmir, North-eastern states and Naxalite hit states.
- Posts : 12
Join date : 2016-08-04
Although, I think the Damage is likely to be much greater than any possible benefits as it is causing much hardship to a common man than those little effect this step is in eliminating “black activities”
Day Zero – WAS AN ANNOUNCEMENT NIGHT
A Game changer! Master stroke!
Day 1 -
A) Vendors/ staff/One n al - Elated as the problems are common for one and all (in a way) and everyone stands in the same queue.
B) Folks with thousands grand’s throng Jewelers, Electronics shops and Emporia.
Day 2 - REALIZATION
PM was not joking when he asked for a will full declaration by Sep end. Citizens should have paid heed. A bold and confident step.
Folks equipped with plastic cards take a day off to get their parents pathological tests done or to help them with their groceries. I won't stray on to other myriad problem areas as of now.
Questions arise as to what is next -Black money hoarders - Already enough discussion on this. Few already converted before and the rest very well know how to do that post announcement.
Terrorism sponsors- Yes, taken care of at least till a way out is found which has never been an issue for folks whose sole aim, bread and livelihoods are based around this.
Okay now most important- Who/ What industries are going to suffer - Physical retailing, Automotive, Farming, Tourism, Jeweler business, Event management, Real Estate, Electronics esp. high end, Fashion labels, Traders, Logistics, Construction, Handicrafts, Hotels and hospitality, etc. If these have to be demonetized, then we need to immediately customize solutions (look for alternates) for each of them.
For any economy to be mobile, the money in an economy needs to be rotated and not stalled. Well this demonetization step kills a lot of percentage of transactions and thus mobility.
Agreed that the percentage of folks in tax bracket is going to swell and thus add money to economy..and then? What? Reduction of taxes for salaried...Well that may happen..and the taxed class would be so happy as never before. There are countries where there are no taxes at all and there are countries where the taxes are as high as 45% on whatever you earn...where would you want to be? Not just this, the amount of 'transactions' part needs to be kept in mind.
This step has more or less closed any possibility of fresh job creation in a lot of sectors for a long time. No amount of unearthing black money can make up for lack of jobs. That may cost him to an extent in the next election.
But then this is a non expert view. You have access to smarter people. But sometimes, smarter people give you answers that they think you want to hear.
Thus, I think the intension of our honorable PM Narender Modi was good but the way the situations “till now” have turned up…I would surely say it was a bad outcome
- Posts : 8
Join date : 2016-08-06
>WHAT IS DEMONETIZATION?
It is a radical financial step which taken by govt. of the country in which a currency validity 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.
On November 8-2016, our Honorable Prime Minister Mr. Narendra Modi announced in a broadcast to the nation that Rs.500 and Rs.1,000 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.
>IMPACT OF DEMONETIZATION
1:The major 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.
2:Demonetization will help in boosting up the economy. 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.
3: 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.
4: It also had a major 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.
Demonetization will help in the growth of the country.But adversely it also has affected the daily life of common man,small vendors and small businessman and small industry,because the govt.has set the limit of daily withdrawal limit rs.2000 and rs.20000 in a week in the beginning but after some time the limit was increased to rs.2500 and rs.24000 daily and weekly respectively.
It has affected mostly the life of people who spend their life on daily earning.
At last in conclusion i would like to say that the pain or problem we all are going through is for a short span of time,but in future its going to have positive outcomes.So for some days we should co-operate with the govt. for ours betterment as we know that there is "NO GAIN WITHOUT PAIN".
- Posts : 11
Join date : 2016-08-06
Simply, Demonetization is a radical monetary step in which a currency unit’s status as a legal tender is declared invalid. This is usually done whenever there is a change of national currency, replacing the old unit with a new one.
The ‘demon’ in demonetization is in the beginning.
Troubles due to present Demonetization:
1.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.
2.People are facing problems because the limit of withdrawal has not been kept at a higher level.
3.People have to stand in long queues in banks to exchange their money or to deposit or withdraw some money.
4.People who do not have bank accounts are facing problem.
5.Foreign tourists visiting here are equally troubled as they are unable to use smaller denominations.
Impact of Demonetization on Indian Economy:
Impact can be both Positive and Negative on the economy.
1.Black Money¬- Black money stored in the form of Rs 500 and Rs 1000 notes will be taken out of our system. A recent study showed that India’s black market economy at over 30 lakh Crore or about 20% of total GDP.
2.Terror funding- Fake Indian Currency Notes (FICN) network will be dismantled by the demonetization measures. Taking out 500 and 1000 rupee notes out of circulation will have a lasting impact on the syndicates producing FICN's, thus affecting the funding of terror networks in Jammu and Kashmir, North-eastern states and Naxalite hit states.
3.Prices of land will fall and it will help the common man.
4.Deflation in the Economy-It is expected that coming 6-7 months to witness a considerable level of deflation. Sectors like real estate, construction material unorganized trade and services will see significant pain in the near term.
5.Moving towards digital payments- Demonetization will likely result in people adopting virtual wallets such as Paytm, Ola Money etc. This behavioural change could be a game changer for India.
This [demonetization] is a step which will make a positive difference, if the transition challenges get handled well by the administration.
- Posts : 13
Join date : 2016-08-08
Age : 21
if we want to talk about it in the context of current demonetization then we should say that its outcome in the short is not good but definitely the outcomes in the long term will be good and better. this decision of demonetization which taken by our Honorable prime minister Mr. narendra modi will lead us to a good future and a new india. this will be a great decision in the near future.
in the period of 6-12 month all the population and economy will suffer but in the long time this will be fruitful from the this decision the flow of black money in the economy will be stop not 100% but around 70% and it is a huge number and this will also gave some pause on parallel economy it will lead to a circulation of money in the economy from the upper class to lower class and middle class every one will get the benfit of this. in the short term it hurt the our daily day to day life we all have to suffer for cash or liquidity. we all can see the lines out side the banks daily.
Positive impact :-
1. black money will vanished from the economy
2. funding of terrorist groups will almost stop for a certain time period
3. it leads to circulation of money in the economy
4. end of parallel economy
5. corruption will reduce from the economy
Negative impact :-
1. day to day life will get affected
2. rural areas and uneducated peopal will face many issues because they are not able to do online transitions
3. share market was affected badly
4. real estate
5. corporate sector is also got affected
Overall we can say that it is a really a challenged situation in the short run but surly in the long run we all will got many benifits of this decision.
- Posts : 10
Join date : 2016-07-19
As Recently, Mr. Narendra Modi has announced that Rs.500 and Rs.1000 will not be legal after 12a.m. on 8th November .He has taken this decision with the good intentions but due to this many problems are arising like daily workers,old people,travellers are facing problems. Rural areas people are also facing many problems because some do not have their Bank A/c. So this step was taken to remove the corruption, terroism and black money but it is creating many problems.
TROUBLES PRESENT DEMONETIZATION:
1.New notes is useless for day to day transactions
2.Rural people are facing problems because of not having Bank Account
3.Shortage of money due to lack of proper planning
4.People have to stand in long que to exchange the money and wait for long hours.
Impacts of Demonetization in both positive and negative way:
1.It has reduce the India's GDP growth i.e. liquidity crisis and deflation
2.Loans will become more cheaper
3.Black money stored in form of Rs.500 and Rs.1000 will be taken out of our system .As per ICICI Securities Primary Dealership ,the government's plan to scrap Rs.500 and Rs.1000 notes will uncover up to 4.6 lakh crore in black money.
4.Resale transactions in Real Estate Sector often have a significant cash component as it reduces incidence of capital gain tax.
As in last there is a Positive Impact on :
Negative Impact on:
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Join date : 2016-07-27