How demonetization affected the economy?

Money is the item which is needed to everyone so that the needs are fulfilled by the person. Anything can be purchased by the help of money and when it comes to luxurious items you need more money that you actually have. In that case, one needs to search for money and sometimes a person falls in a wrong path to accomplish the target of money that he needs or desires. Once you have a desire of more money, you think about various things that you can do in order to earn more money. Black money is the similar type of money which a person accumulates if he is in need of money and stores the money so that it can be used at a later stage. In order to accumulate such black money, the government banned the notes of the country so that all the money which is circulating in the economy comes back to the government which is also known as demonetization. It is a phenomenon which allows the government to get the hold of money which is kept in the safe of people and not used in the society or economy. The banning of Indian currency took place in 2016 in the month of November. The effect of demonetization in India had some positive as well as some negative effects. The people who are having more money as black money were recovered by the government and it was found that the money which is circulating in the market came back to a percentage of 99 percent. Rest of the money was not discovered by the government due to many reasons as the people were not able to recover the money which is kept overseas.

The online money came into existence and there was a vast demand of online money because of the scarcity of the cash in the economy. People got to know more about the online transactions and more people became aware of the online market of money. The black money which was kept in the safe of people was again introduced in the market. The positive effect of demonetization which many people failed to notice is that the money which is kept as black money were giving interest free loans to the government of India. Due to demonetization, the money came into existence and now, the government has to pay interest on the money which is given to them by the people. More positive effects of demonetization were that the fake money came to an end and ultimately all the currency notes came back to the banks.

People are trying to make the process of demonetization as a success which is not the same. It had many shortcomings too. The fall in the GDP of the country from 7.6 percent to 5 percent was a total shortcoming of the nation’s economy as it is said that the economy of the country was in the healthiest state when the money was banned in India. The chaos created in the country was a major shortcoming in relation to demonetization. The poor was the one who was suffering from the demonetization as there was long queues in the banks for notes changing and there were long queues in the market for the supply of goods as all the people stopped accepting the old notes and the new notes were not in circulation at the same time. It took the government more than 60 days to make the new notes available in the ATMs and banks. There were loss of life in the process of demonetization and it is noticed that 150 people lost their lives because even the hospitals stopped accepting the old currency. It has been more than 3 years now that the new notes are made available but it has not seemed to show much benefits to the country. All the people are hoping that the steps taken by the government to demonetize the money is a successful step and the terrorist funding stopped but the time money was banned there were consecutive three attacks in the country in Assam and Jammu & Kashmir.

Conclusion: Demonetizing the money is the step to curb the black money in the country which was long needed and it helps the country grow in the short, medium and long terms. The fake money is also completely abolished from the country and the terrorist funding will also come to an end in the long run. The peace which is lost in the country due to the problem of demonetization is yet to be found by people but this is a land of resilience, so the problem will sooner or later be overcome.

You may add some of the points in the response section if you think that the demonetization is a success. Your suggestions are important.

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