One Year of Demonetization: A Success or Failure?

On November 8, 2016, Hon’ble Prime Minister, Mr. Narendra Modi, while exercising his powers under Section 26 of the Reserve Bank of India Act, 1934, had declared the currency notes of Rs 500/- and Rs 1000/- as being derecognized as currency. With this declaration, he set a panic within the citizens, when such de-recognition was made with effect from midnight.

While stating the reasons of increasing corruption, scams and tax evasions, he had stated that this step was in furtherance of bring the cash flow back in the economy. The ministers had also argued that this step would have a long term effect and would gradually help in the increased GDP of the nation.

However, as could be observed, nothing as such happened, the term of demonetization was only met with large serpentine queues, a large number of deaths due to nervous shocks, cashless ATMs and helpless banks, who were not even prepared for such huge crowds.

One year has passed since this blasphemous declaration and in that one year, this step has been rightly called as “organized loot” by Mr. Manmohan Singh. Unlike the estimated revenue growth of 15-20%, it has merely reached up to 6-8% and has also been accompanied by a drastic drop in the GDP, which was supposed to grow.

Further, it is also to be noted that the Central Government did not think twice before applying the provisions of GST in the nation, which, rather than helping the economy, only made things worse. With the lowered GDP and the suffering middle and lower class, GST only helped in increasing the tyrannical states of the struck people.

When RBI reported that 90% of the cash had been submitted to the banks, questions arose towards such an unplanned step taken by the government, which was supposedly meant to bring about accountability.

After one year of demonetization, all that can be stated is that, as rightly stated by Mr. Singh, demonetization was a “monumental mismanagement”. It was nothing but an improper and unplanned political policy by a government, who has still not been able to satisfy the reasons for taking such a drastic and problematic step.

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