SMishra

· 13 Nov 2021

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What is Demonetisation?

The economy of a country adopts several measures to resets its economy when an emergency arises. One such step is demonetization. The last demonization was done at midnight of 8th Nov 2016 by PM Modi. The govt by these measures tried to eradicate the black money, currency notes in circulation. The one thousand and five hundred rupees notes were declared illegal. The notes were asked to be exchanged within a stipulated time period. A country also adopts this to control the inflation of the amounts to more than 86%. Besides black money, the other measures were drug trafficking, tax-evading, and being used by the terrorists. At that time 50% of the Indian economy was based on such currency. It was not done for the 1st time in our country but several times before. After the declaration, several problems arose. They had to stand in queues before the banks and some people it is reported to have died, people had to waste their time by standing in queues. The economy of our country went beyond control due to such money in circulation. The terrorist's activities were difficult to bring under control. They gather money by looting banks, or people and use this money to buy arms and use them to kill people and destroy infrastructure. They derail the economy by killing people on duty. Some people were not able to exchange their five hundred- and one-thousand-rupee notes. it may be due to a lack of awareness.

Everyone thought that it was not planned before but it was a misconception as the govt did its planning long before by introducing zero balance accounts under the Jan Dhan scheme and tax declaration of the income till 30th Oct 2016.

Some challenges that are faced by the people are going completely cashless and disconnection of internet. Therefore, they would center on E-cash and E-payment. As it was done in the mid-night it was a completely chaotic situation and people faced different difficulties in exchanging and depositing the demonetized banknotes.

We can still bear with the higher class and middle-class people but the major problem was faced by the rural people. This was because cash is the only thing they completely depend upon for agriculture. Due to less connectivity of the network and having less knowledge of computers they suffered a lot.
Black money is the main target of demonetization but it was reported that approx. 99% of old currency has been deposited in banks. Again, it's positive and the best outcome we found was the cashless transition. Therefore, demonetization gave India a new vision to see the economy differently. It is one's perspective of seeing demonetization as a successful experiment or failure.

Some references for more details:
https://upscbuddy.com/demonetisation-essay/
https://www.aplustopper.com/essay-on-demonetisation/
https://www.toppr.com/guides/essays/demonetization-essay/

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