December 5, 2016
Certainly, everything doesn’t goes well with an economy if suddenly more than 80% of its cash is termed as cancerous having a limited life, before terming it as an illegal tender by a government. It should worry the government even more so, if the economy is accelerating at its top care-free attitude speed, while the rest of the average world economy moves at a bullock-cart pace.
People get distressed, business declines, newer businesses wait for the stars to align and possibly, if there’s a strongman heading the ruling party, we have a united opposition opposing the bold move.
Is this Demonetisation Process Doomed to Fail?
The Demonetisation around the world haven’t seen real success till now. But one thing amongst them is common: They failed due to Breakdown of economy, and /or unpopular government at the centre sparking riots. Possibly because they were not digital, unlike India which is becoming digital at a pace fast enough to make even China jealous. Aadhar card linkage with the bank accounts has played a huge role in it.
Then, Why Some of the Citizens are not Supporting?
Of course, people are not whole-heartedly supporting it because of the
A cash economy has produced a domestic black market to the tune of over a trillion dollars in India and abroad, in the form of cash, gold, land, mansions, etc. A cashless economy can not only delete these entire black phenomena to upto atleast 99% if not more, but also save RBI’s money and time which comes from printing more money, coins, damaged bills and disposing them off, etc. Ofcourse, a cash economy has done wonders for some people.
But, Why Should I Care?
The middle-men corruption will be eliminated if the country goes cashless for the money will reach from point A to point B in its entirety, without meeting any roadblocks aka middle-men.
Transparency in transactions will certainly help raise Govt. revenue, making loans cheaper and help the government in spending more on Defense, innovation, welfare schemes, Education, Sanitation, etc.
Any Challenges for the Government?
It’s a good thing, that the government at the centre is pretty popular due to PM Narendra Modi’s honest image, and his no-nonsense attitude towards even his own party men. But the economy, as big and vibrant as India will have to see some tough days, maybe months before it comes back on growth track again with GDP numbers.
While the physical theft will become an ancient art, it’s the cyber theft which will be challenging for the government to protect citizen money from getting destroyed and prevent changing the value of the national currency Dollar.
Thus, raising money from the underground economy will lead to fairness for everyone , make stock markets show real valuations of the companies and allow the government to take informed decisions as to where and how much the money must go or be taxed. Marriage of a society to digital economy seems fair, atleast for now.