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  • Category: General

    How demonetization slows down Indian economy?

    Due to demonetization in November 2016, many small businesses in India shut down due to low demand of their products in the market. So a very large number of workers lost their jobs.
  • #665695
    There are some confusions and misunderstandings about the demonetization drive done in our country. It was a very big exercise seeing the daily cash requirement in the system. Due to this people had difficulty in getting cash from the banks as so much cash can not be made available to the people during the transition period.

    The basic purpose of this exercise was to clean the system of black money and it was very successful in that respect. During this process some workplaces thriving on black money closed and people lost their jobs but within a small time they were absorbed back in the system as the minimum work force required by the system did not decrease and the only difference was that they got their salary from white sources and naturally the salary was less than what they were getting earlier. This was highlighted by the media in different way telling that unemployment surged. To that extent there was a slow down in the Indian economy but the analysts in our country and abroad forgot to note that Indian economy was already in a slow mode before demonetization. Reduction of black money has affected many sectors and many aspects in our life today and the country has benefited by that though they are not tangible to the general gullible public as well as to the economic experts.

    Knowledge is power.

  • #665743
    I don't know many details about the effects of demonetization but definitely, I experienced some advantages from this. When I purchased a plot, total money was given to the seller in white. No black money transactions in this. This factor has been experienced by many people like me. There was a reduction in land prices also at that time.
    Another advantage is the cash transactions came down and online transactions increased. This gives a lot of transparency in transactions. That is good for the economy.
    A lot of money has come and got into the bank accounts of many people. A good amount of black money has seen the daylight and got converted to white money.
    As far as I know, the problem of losing jobs was a temporary phase and later on, the people got into their jobs. The loss is very negligible.
    When there are many benefits we may have to accept one or two problems. We should not worry about that.

    drrao
    always confident

  • #665745
    I don't know how demonstration affected economy or other things but it was done to take out the black people had hidden in their lockers and i think this purpose was solved by demonstration. How it affected the workers to lose their jobs i didn't get? If they lose too that means the owner of the business was doing wrong that's why got affected from the demonitisation. The logic behind it was good but i don't know why people say that it was not good for us.
    Sanjeev

    " We can complain because rose bushes have thorns, or rejoice because thorn bushes have roses.”
    – Abraham Lincoln

  • #665758
    It is the general tendency of the opposition to criticise the Govt policies. The problem comes when they do it blindly for everything the Govt does. Same thing happened in the case of demonetization. It was the courage of the ruling party that they took such a strong decision. It was very difficult in a big country like India to maintain the new currency supply once the demonetization was announced and it was itself sufficient to topple the Govt in power. But the ruling party took this great risk and announced monetization. It created ripples in the black money circles and the black economy which was a large part in our economy came to standstill. So the people who were engaged in it temporarily became unemployed. This thing was highlighted by the opposition party but they never mentioned black money in their statements. So the gullible public thought that Govt had harmed the industry.
    Knowledge is power.

  • #665765
    The ongoing counting of the votes is good enough for us to understand on the implications & the achievements of "Demonetization".

    Hope so that this satisfy the query of the author.

  • #665783
    The process of demonetisation was difficult to understand even for the experienced economists of our country. But it had some effect in cleaning the financial system as black money was driven out forcefully and though it created inconvenience for the public, it did the purpose for which it was intended. So it was a good measure taken by the Govt.
    Thoughts exchanged is knowledge gained.


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