What do you think of the Modi government’s move of banning old Rs. 500 & Rs. 1000 notes? [poll]

+6 votes
asked Nov 23, 2016 in Polls by challenger (13,790 points)
tackles black money, corruption & terrorism
No effect onblack money, corruption & terrorism
commented Nov 30, 2016 by tuo.current2 (1,905 points)
Banning of old notes will not help to curb corruption, black money or other issues. Black money does not only exist as stock but a large amount of money is also in circulation. If government`s intention is right then it should come up with more stringent measures to tackle this issue. That only time will tell.
commented Dec 2, 2016 by sugar (50 points)
Banning old notes was the right decision with the bright intention for our beloved nation but govt failed in its implementation. In my opinion, this step can tackle many problems mentioned like corruption, terrorism, black money etc not totally but temporarily. corruption for any nation is like the termites in wood and this step could have been the  best termite killer if govt policies would have been strict in accordance with this decision. corruption will continue in new currency too. govt should have researched about the corrupt practised  before banning big notes. so in no way, it ends corruption and other problems totally but definitely pause them for some time. Everything is now on strictness of govt policies and decision.
commented Dec 3, 2016 by rahul agarwal (90 points)
The measure taken by the modi govt to demonatise 500 and 1000notes have its own merits and demerits .as first the purpose to introduce this to eliminate black money completly from the country . The initiative is good but does it completly eliminate the money . I think it not so as the people having black money are now converting their sum into other resources like in metals(gold,silver,etc),and through other sources . when  we talk about corruption and terrorism becuase of demonatisation the level of corruption in india may not vary as the corruption in india is have its roots from the highest to the lowest level so the measure may not address to such level and in case of sponsoring to the terrorism their would be a tempoaray break but it does not eliminte the issues completly recently the firing in jammu and kashmir were a few terrorist died we found a bundle of 2000 notes . This shows that merely demonatising the currency would not address the above problems
commented Dec 8, 2016 by vishutk (55 points)
For taking action on any problem which is  required to be solveed, need a correct data to analyse the extent and planning for the action to be taken. It is not just demonatisation but the major role is in handling the situation and proper plan in executing the demonatisation process. Firstly it will defenatly affect the fake currency flowing in our country by terrorist activities. Second thing is by channelising the money flow only through by depositing in bank accounts will give the near to fact figures. Which will defenatly help to reach to goal of this process.

12 Answers

+1 vote
answered Nov 30, 2016 by salimtyagi92 (80 points)
its a drastic measure taken by the government in a horrid fashion
+2 votes
answered Nov 30, 2016 by saiprasadrb (90 points)
Though the quality of implementation can be debated (a trade-off to maintain the level of secrecy that it was intended to be), there is no second thought about the intention being right, and the implications of it on the parallel economy.

The critics are overlooking a thing, the move is being commented upon in a myopic vision (several authors did it, including Amartya Sen), and is being seen as a one-off move. If seen as a standalone measure, the cost-benefit may seem little.

On the contrary, if you fit the "Demonetization" in a larger scheme of things and see it as a piece of cake, everything will seem to make sense.

The Jan Dhan Yojana, Direct Benefits transfer, Statutory status to Aadhar, GST, Real Estate Sector Reforms, DTAA Amendments with several tax havens, Direct Information sharing Agreement from Swiss Banks, Income Declaration Scheme (already yeilded 30000 Crores),  Demonetization, Capital Infusion for NPAs in Banks as a consequence, Direct Tax Code in the pipeline with others like Contract Enforcement reforms, Bankruptcy and Insolvency code, Taxing Agricultural Income.

There is going to be a temporary setback on the economy for sure, with money supply in huge amounts being sucked, may even have a contractionary impact on GDP, and deflation for a quarter. But the staggering numbers going to be revealed in Budget session will all be worth the pain. My rough estimates, a minimum of 1L crore of tax earnings from this drive alone (mind you, this is the most conservative estimate).  Plus additional benefit of weeding out the counterfeit notes, and a blow to the terror financing through it.

The move also forcefully changes the habit of cash-only transactions, we may also see huge number of current accounts being opened by the small time businesses (Financial inclusion of small businesses) and TIN registrations, boost in sales of POS machines, dispersals of Credit cards, usage of e-wallets, incidentally higher financial literary among masses.

Better identification of Beneficiaries is an added benefit. With the level of financial data being collected, the savings from better implementation of welfare schemes can't be overlooked either. Leakages will be plugged.

For having been used to getting only doles from Govt schemes. The inconveniences caused by Govt's move may bring in despair, and it may even backfire politically in the upcoming assembly elections, but I think Modi has got it covered with the rhetoric around Patriotism and Terrorism, which usually yield more votes than rational analysis.

Though, on the face of it, this assessment may come off as extravagantly optimistic. So be it. I prefer being hopeful because as critics say Modi is autocratic leader, he sure is, and for once what it's worth, an autocratic leader does what he says, walks the talk by definition. He did promise he will bring acche din with drastic reforms.
+2 votes
answered Nov 30, 2016 by Pra Na (1,750 points)
Firstly, it is not Modi government. It is the decision of the INDIAN govt.

The decision will only reset money circulation and give an opportunity for the economy to start clean from scratch. But the real question is will it remain clean? There seems to be no decisions taken till now to keep in clean as time passes(except for the newly passed real estate bill).

Lokpal is stuck, the govt themselves aren't ready to come under RTI(which makes the law ineffective), there are no reforms wrt election funding --- hence the creation of black money and corruption will remain the same and continue

It actually tackles them only temporarily ...

Such a move should have come as a last step in a series of election reforms, tax administration, real estate reforms (for which a new bill has been passed), education sector Reforms, compulsory electronic transaction above a certain amount of money,  etc
commented Dec 14, 2016 by PRASHANT TYAGI (1,175 points)
I disagree with your very first line.
commented Dec 14, 2016 by Pra Na (1,750 points)
Why ? ..
commented Dec 14, 2016 by PRASHANT TYAGI (1,175 points)
Even, Forget about the Modi "GOVERNMENT".
What I think is that it is only Modi's decision.
Am I right or not?
commented Dec 14, 2016 by Pra Na (1,750 points)
Just one person's decision would render our system of governance an autocracy.  
I don't believe it's that way.
At  least to some extent it's a collective decision
commented Dec 14, 2016 by PRASHANT TYAGI (1,175 points)
Dont think that I am accusing someone but what I heard is that even the Finance Minister was not aware about it.
Now, if it is right How should I say that it was a collective decision.
And other thing is that when currency was demonetised back in 1978, it was done by an ordinance. And there is no such thing in recent demonetisation.
commented Dec 14, 2016 by Pra Na (1,750 points)
We can only speculate abt these things.

Anyway, RBI was aware of it so essentially it's a group decision ..
Of course PM's role is major but I'm not comfortable calling it as modi devising or modi  government.
Anyway u r free to think ur way :)
commented Dec 14, 2016 by PRASHANT TYAGI (1,175 points)
First of all, these are not speculation.
Secondly, It is not a matter of one's thinking. Its a matter of great concern and truth must come out in public.
When there is suspicion in governance it is a threat to democracy.
Means whoever is responsible - opposition or government, it is the economy and people who are paying the price of this "monumental mismanagement".
–3 votes
answered Dec 2, 2016 by torender (65 points)
Demonetization of 500 and 1000 rupees note is a right step  as it will eradicate black money, funding of terror activities , poverty and corruption up to some extent.Though the decision is causing grave inconvinience but when seen in long run it is far beneficial and worth enough of the inconvinience. The step in my view is laudable
–3 votes
answered Dec 3, 2016 by divyam_gogia (935 points)
Indian Government did not ban 500-1000 Rupee note but it attempts to Replace the old Circulated currency among citizens. I personally believe it tackles the problem of Black money, Corruption, terrorism and some other terrorist fundings. Though the govt. is not set to implement this scheme so early but it is good to be the late bloomer. It is a historical Step taken by any govt in Indian History, it might take some time to work properly, we all should support it and we will definitely get rid of all types Corruption related things in future.
0 votes
answered Dec 3, 2016 by Priyanka (150 points)
Indian Government did not ban 500-1000 Rupee note but it attempts to Replace the old Circulated currency among citizens. I personally believe it tackles the problem of Black money, Corruption, terrorism and some other terrorist fundings. Though the govt. is not set to implement this scheme so early but its is good to be the late bloomer. It is a historical Step taken by any govt in Indian History, it might take some time to work properly, we all should support it and we will definitely get rid of all types Corruption related things in future.
0 votes
answered Dec 4, 2016 by aakash (95 points)
recently new currency notes worth rs 4.7 crore seized in bengaluru.

implies in recent times where people have no money in hand,confiscating such a large amount indicates presence of existing loopholes..
+1 vote
answered Dec 5, 2016 by RITUN BAILUNG (90 points)
most of the people are saying it is a good move to curb black money,terror and illegal funding. But my point of view is this measure is not adequate and people friendly at least at this point of time.Why demonetization?It is the only measure we had left or any another measures exists.Moving towards cashless without basic banking facilities and knowledge create chaos. Another important aspect is change of forms of wealth.How it will be tackle it is a relevant question.
+1 vote
answered Dec 5, 2016 by PRASHANT TYAGI (1,175 points)
edited Dec 19, 2016 by PRASHANT TYAGI

The intention of the government to demonetize and scrap currency notes of RS.500 and Rs. 1000 denomination is highly commendable as it declared a perennial inevitable fight against the corrupt storage of black money and counterfeit currency.Generation and accumulation of black money has become a major factor which is derailing our economy and due to which development is laggarding. It also check the practice of terror financing and pumping of illegal counterfeit currency into Indian market.Government also gave chance to people to voluntary declare their undisclosed and unaccounted income under Income Declaration Scheme before launching such a revolutionary attack on black money holders.

Now after declaring such a rampant step it comes to the implementation as it requires a lot of logistic as well as man power to make it reap the benefits. But as far as implementation is concerned it has raised some serious question about the hardship facing by poor farmers, small traders, housewives and common man. ATM also need recaliberation therefor they again need some more weeks to operate normally and banks also need to operate overtime to meet the demand of their customers. Also as the transaction limit is also set so it will create problem to some household who need urgent money for meeting some unexpected emergency like hospital, marriages etc. Government also notify that the old currency note are still acceptable at some places like major utility payment center including electricity bills, customer cooperative stores,milk booths, railway station, crematorium, hospital etc.So it provides some relief to the people.

The most important is however it solve the problem of storage of black money but there is no step to check on generation of black money which should also be taken into consideration. Also as we are cash based economy it is not very convenient for the people especially poor rural population to go cashless. Government should take such a decision with fully preparedness otherwise the inconvenient and hardship outplay the advantage of such scheme. To some extent this scheme has proved logistic nightmare for the financial administration and shows the lack of readiness on the part of government.

We hoped for the best but didnt prepare for the worst

0 votes
answered Dec 7, 2016 by Sonu kumar (335 points)
Banning of old high denomination note of 500 and 1000 is the government decisive steps towards curbing black money, terror funding and fake currency.apart from these evils the step will also bring down dearness of all commodities from vegetables to buying home, gold export will also reduce which help in enhancing our foreign currency .
0 votes
answered Dec 13, 2016 by Lalith (1,020 points)
Best mov sinc independence
0 votes
answered Dec 14, 2016 by Indus (250 points)

There is no doubt that corruption and the menace of Black Money in India is a multi headed hydra. In such a situation, EVERY STEP MATTERS.

Demonetization of Rs.500 and Rs.1000 notes is one among many steps taken to free the country from a parallel economy which has taken prominence over the regular economy. So much so that our economic system is challenged by hoarding, inflation and FICNs; our social system is facing the challenge of lack of government spending on account of low tax base; our political system is facing the challenge of crony capitalism and our security system is facing the challenge of organised crimes funded by parallel economy.

However, demonetization alone can not solve these issues. Slew of measures are needed such as:

  1. measures to recover black money from abroad such as effective implementation of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
  2. effective implementation of Benami Transaction (Prohibition) Amendment Act 2016 to prevent and prosecute those brushing the ill gotten property under the carpet to evade tax
  3. increased engagement with other countries under DTAAs or Tax Information Sharing Agreements
  4. measures to curb tax terrorism such as APAs, Transfer Pricing Rules etc

It can't be argued that the central govt has demonetized the HDCs without any prior preparation. Several steps taken before demonetization are as below:

  1. Jan Dhan Yojana : ensured that bank accounts for all the unorganized workers, farmers, women and others are created.
  2. Aadhar Card : which is helping many to transact in cashless mode
  3. UPI framework : over which several banks have developed mobile apps as a means to transfer money
  4. Payment Banks, Small Banks and BCs : to help reach the unbanked or remote areas
  5. Digitization and wide spread internet connectivity
  6. Competition among telephone operators which has reduced the cost of owning a mobile phone and internet connection, with the latest Reliance Jio

Many other steps are awaiting to ensure a complete fight against black money such as : bring political parties under RTI, make political parties accountable for election funding, effective implementation of measures such as declaration of assets of public servants and so on.

So lets hail the latest step i.e. Demonetization and move forward with what more can be done to achieve a nation with ZERO TOLERANCE to Corruption and Black Money.

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