The whole country is in turmoil. The reason being PM Modiís decision to demonetize higher denomination currency notes. The effects of this decision can be seen everywhere, from huge queues in front of the banks to people forgoing paper cash altogether. Addressing this huge change in the countryís status quo, we had Mr. Samuel Tharur educating us on the pros and cons of demonetization on 15th Nov in the OAT.
Most of the political scientists praise PM Modi on his bold move. They realize that this move acts like an attack on black money holders. This way people with a horde of black money are now left with a pile of trash, or if they are bold enough to go to the banks, they have to pay a 200% penalty on income tax amount. Also, many of the fake currency notes were in the denominations of Rs. 500 and Rs.1000. This helps break up many of the counterfeit rings working in the country. Terrorism, being another huge issue in India will come to a temporary halt because they will have trouble getting their funds. This move brings about a transparency in transactions. This move plays a huge role in PM Modiís vision of digital India. While it is practically impossible to have a 100% cashless economy, the majority of hard cash in circulation will decrease and our economy will get more digitized.
While applauding PM Modi, we can also point out that he hadnít foreseen the problems the common man will face. The banks are extremely over-crowded leading to tremendous chaos. There is a shortage of money for the common people. Also the stock market was terribly affected because this move along with Trumpís victory leads to a depression in the market. Due to shortage of money in the market, a short term inflation of cost occurred. From the price of gold to the price of vegetable and fruits, the spike is abnormal. Not just this, the wedding season is affected terribly. Families who have been saving up for a wedding in hard cash are in losses. These were just some of the points pointed out by Mr.Tharur
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