The Indian Economy has never before been scrambling so much to get back on its feet. The entire financial system was knocked down on the evening of 8th November when Prime Minister Narendra Modi decided to introduce the policy of demonetisation. In an address to the nation, Modi announced that the widely-used Rs 500 and Rs 1000 notes would no longer be legal tender. However, after nearly three weeks of coping with the situation, we are left wondering, did the Modi government manage to pull the wool over our eyes?
The Prime Minister’s argument was simple. Yes, demonetisation will cause some trouble. However, he’s asked citizens of the country to bear the brunt of demonetisation for 50 days in lieu of eradicating black money and counterfeit currency from the Indian economy.
Opposition parties have, of course, found the move simply unacceptable. From ultimatums requiring rollback of demonetisation to nation-wide protests, the opposition has tried every trick in the book to block the move. In fact, the issue has created such a ruckus that, in the two weeks since the commencement of the winter session of the Parliament, no work has been done and neither has any issue been tackled. The unfortunate part, though, is that the opposition’s protests seem to add on to the ‘deception’ being carried out by the government.
Protest for the sake of protest has never been of any use. Rather than intelligently countering the government and engaging in a debate over the merits and demerits of demonetisation, the opposition is simply making a lot of noise, thereby allowing citizens to presume that the government is actually on the right track. After all, the objectives presented by the government are indeed, laudable. So why then is demonetisation such a bad move? Is it simply the implementation that leaves something to be desired?
The prime target of demonetisation is unaccounted or ‘black’ money. The question really is, how much black money in India is held in the form of Rs 500 and Rs 1000 notes. The stories of notes being thrown into the Ganga or being burnt are fast hitting headlines. If pondered upon, though, it is the mere fact that the incidents are so rare that make them so epic. According to information released by the RBI, approximately Rs 8.11 lakh crore has been deposited in banks and Rs 33,498 crore (3 percent) has been exchanged since the launch of demonetisation on 8 November. This means that 60 percent of the currency has already entered the banking system within 21 days of the launch of the move. With a further, 31 days at hand, the remaining 40 percent is expected to trickle into the economy.