5 Reasons To Hail Narendra Modi’s Decision To Demonetise Rs 500 And Rs 1000 Notes
The Narendra Modi-led government's decision to scrap Rs 500 and Rs 1,000 currency notes was taken to create a corruption-free India
Jitters went across the nation when Prime Minister Narendra Modi stood in front of the country during prime time and announced his decision to demonetize currency notes of Rs. 500 and Rs. 1000. The aim was to bring down curtains on the parallel black economy. In just about two minutes, thousands of crores of illegal money being circulated via different avenues in India or hoarded at different sites lost its value in the Indian market. (According to a latest report by ‘Yes Institute’, an estimated sum of about Rs. 4 trn. is the total size of unaccounted economy in cash, also known as black money.) If not all of the money, then a majority of it did get evaporated from the Indian economic pie in a matter of a few seconds, a few words in fact.
The move, nothing short of a surgical strike on black economy, I believe is good for the country in the longer scheme of things and such is also the word of a majority of experts (including economists and experts on black economy).
Here are five reasons which substantiate my above mentioned statement.
(Do read this listicle- especially for those who have been critically analyzing Modi’s decision)
1. Corruption Will Cease To Exist
It was and is everywhere in India, from a giant manufacturer, to a local paan waala, corruption had over the past set its foot in every nook and corner of India. It had become such a norm that people would shamelessly boast of their own cases of involvement in corruption and direct their immediate society toward the same. With a curb on black money, corruption has now been shown the door, door which has been closed behind its back. With so much unaccounted money already been eradicated and more scheduled to be curbed in the coming few months, it is imperative to note that the move has stung the corrupt sharply and will continue to serve as a barricade for future cases of corruption. The move will ensure a refined economy benefitting the honest. For example, the cost of real estate pan India has nearly halved, so because the black part of the value of property doesn’t exist anymore. Any honest saver can now claim a property which was out of his/her bounds earlier in less than half the originally quoted money. There many other examples of the honest benefitting due to a cut in the chords of corruption.
2. Driving Deflation
As said above, the prices of property pan India have nearly halved. But not only real estate, this surgical strike will affect other sectors as well. Reason- Those who have hoarded black money will be afraid to make purchases in the market due to a fear of declaring their assets. This will surely cost the producer due to decreased demand. Though, for the honest consumer, this will serve as a boon as decreased demand with respect to a status quo in supply will mean lower product rate in the market. The economy hence will go through a phase of deflation as products will eventually get cheaper, benefitting the honest. Simply economics.
3. Lending Loans Will Become Easier
Yes! For you, it will be easier to get a loan now. As more money gets stashed into bank accounts, the bank reserves will increase. As a result, banks would be able to lend more money, again benefitting the honest consumer of the country who hopes high, but can afford less. Now things might change for him/her.
4. The Dawn of Digital Currency
It has been existing in the Indian markets since a while now, it will only gain in importance henceforth. The digital currency will now slowly get into the consumer and market mindset as under the new scheme of things, only a limited amount of money could be en-cashed via ATMs and banks, paving a way for soft money being circulated via online portals. This will not only make transactions easy, it will also come down heavily on corruption as every economic activity will now be under the lens of appropriate vigilance authority.
5. A Take Down On Terror
It is not a hidden fact that money looped via hawala from across the border is used to proliferate terrorism domestically. Several intelligence reports have confirmed the same time and again. The move by the government to curb black money will mean complete eradication, for now, of illicit money being routed through various harmful resources in India. This will not only mean a surgical strike on terrorism being harbored domestically currently, it will also lead to a future curb on terror and terror related activities both internally and outside Indian borders.
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