8th November 2016, 20:00 hours, Prime minister of India, Narendra Modi made an unscheduled announcement, ceasing the usage of the old currency notes of 500 and 1000 of the mahatma gandhi series, Modi declared that the use of these notes would be invalid after midnight of that day, whereas announced the issuance of new 500 & 2000 notes in exchange of the old ones. However, other banknotes such as 100, 50, 20, 10 and 5 remained unaffected by the announcement including the coins of 1 and 2.
It was further claimed by the government of India that this action had taken place to stop the usage of current banknotes for funding terrorism and at the same time put an end to black money in the country
The government of India also declared that this move is a vital step towards an end to corruption, smuggling and usage of drugs.
However, 9th November and the days following, banks and ATM’s faced extreme cash shortage which left many small businesses to a stand still.
As the saying goes “no gain without pain”. Therefore , to continue with there living people had to stand and wait in lengthy queues for the exchange of old currency to the new ones.
Pain and human cost is inevitable in an exercise like this but a push of DIGITIZATION before DEMONETIZATION. Would have helped ease the pain a bit, says Anuradha Sen Gupta in conversation with India’s biggest banker, Arundhati Bhattacharya. She also reacts to criticism of the RBI’s handling of Demonetization and says restrictions on the withdrawal should be eased gradually.
However, this pain of standing in queue lead to many deaths as this announcement made by PM Modi has not only affected the rich but also the poor.
Initially, this move gained a helping hand by 80% population of this country which includes several banker, politicians and of course the public. Whereas, on the other hand several political parties were strongly against the move further leading to quarrels and debates in both the houses of Parliament.
Chief Minister’s of other states got a topic of discussion. West bengal’s chief minister, Mamta banerjee, without mentioning Prime minister Narendra modi’s name said if someone after coming to power thinks himself to be a ‘dictator’, it is not “good for the country”.
She further targeted PM Modi on note ban saying the industrial scenario in the country has worsened in the last two months because of Demonetization.
Prime Minister, Narendra Modi had requested the people of this country to manage till the next 50 days from the date of announcement, promising that things will turn out to be better after that, to this statement, BSP’s chief, Mayawati again targeted him on demonetization saying, the relief that he promised has thereafter continued to cause misery even after the end of 50 days and asked the Prime Minister to seek forgiveness from the people for making them undergo so much distress.
She further stated that the poor, the middle class, the working class, expected some relief after the announcement made on the 31st of December, 2016, to which nothing happened.
Demonetization has acted as a catalyst in many business activities. People planning to buy homes have postponed there purchase decision, whereas owner have reduced there price to sell there homes.
This move by the government of India is expected to be clear by april 2017 till then all we can do is, wait and hope for the best.