Demonetization and Its Overall Impact
8 Pages Posted: 27 Mar 2017
Date Written: March 12, 2017
Demonetisation step of 2016 was somehow different from to earlier steps because of its sudden declaration taking aback the general public, bankers who were to deal mainly with the situation, as it was feared that if the black market caught any whisper of what the government was planning, they would find ways to get rid of their illicit cash, and the initiative would flop on one of its initially-stated goals. During that intervening period, business across all over Indian economy was disrupted, and cash-dealing sectors like even agriculture, fishing, and other related or unrelated market were severely affected.
In spite of a number of criticisms of the big step of demonetisation, it is true that proponents of demonetisation certainly had good intentions, which proved with the overwhelming response to the government in the assembly polls of Feb. 17 and March 17, but the suffering it has caused to millions of Indians is irreparable.
The step worked as a trigger point for the general public to adopt the alternate banking delivery channels, as momentarily, it was a no cash situation. Government has come out with a number of incentives on cashless transactions like waiver of surcharge on transactions in cashless mode. But the stagnancy in these operations after December 2016 indicates something else. Is the society again tilting towards cash after the normalcy of situation and relaxation of cash withdrawal norms.
As far the other motives behind the big step are concerned, only the time can tell as the steps for curbing of black money may have far reaching effects and will be visible in the time to come. It is hoped that the general public will adopt the cash less mode of banking transactions wholeheartedly in their own interest and understand the need of hour. It is also hoped that the huge amounts spent on technology up gradation by the banks for secured and hassle free alternate channel banking, will not go waste and the trigger for cashless adoption by the general masses will gain momentum.
Keywords: Demonetisation, cashless, less cash, black money, alternate banking channels
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