6. About 3 trillion rupees in
the form of old ₹500 and
₹1000 banknotes had been
deposited in the banks
Indian share market indices
dropped to an around six-
month low in the week
following the
announcement.
7. Income Tax departments raided various
illegal tax-evasive businesses in Delhi,
Mumbai, Chandigarh, Ludhiana and other
cities.
Large sum of cash were seized in different
parts of the country. In Chhattisgarh liquid
cash worth of ₹4.4 million was seized.
8. The Naxalities were crippled
A set back to Hawala operator, smugglers, printing of
fake currency.
End of stone pelting and militancy in Kashmir valley.
9. A bag of burnt notes was
found in Uttar Pradesh .
Old ₹500 and ₹1000 notes
were also found floating in
the Ganges river.
Authorities of Sri
Jalakanteswarar temple at
Vellore discovered cash
worth ₹4.4 million.
10. President of India welcomed the demonetisation move by calling it
bold step.
Industrialist like Anand Mahindra, Kunal Bahl supported the move.
Political leaders from all over the world praised.
11. The move was criticized mostly by the political
Leaders.
Chief Minister of West Bengal and New Delhi
Mamata Banerjee & Arvind Kejriwal called the
new declaration "drama“.
Debate on demonetisation was initiated by
Indian National Congress in Rajya Sabha.
12.
13. Real Estate would crash slowly and recover
quickly.
People will be praised for using digital
wallets like Paytm, PayUMoney etc.
Dream of Digital India will be achieved.
14. In the end we just want to say
that path is truly risky but it will
surely help everyone or beneficial
over a period of time.
We just hope the exchange
process should be easy so that
it will not affect the common
man.
Coins and banknotes may cease to be legal tender if new notes of the same currency replace them or if a new currency is introduced replacing the former one.
The demonetisation of ₹500 and ₹1000 banknotes was a step taken by the Government of India on 8 November 2016.
In January 1946, banknotes of 1000 and 10000 rupee were withdrawn and new notes of 1000, 5000 and 10000 rupee were introduced in 1954.
The Janata Party coalition government had again demonetised banknotes of 1000, 5000 and 10000 rupee on 16 January 1978 as a means to curb counterfeit money and black money.
In 2012, the Central Board of Direct Taxes had recommended against demonetisation, saying in a report that "demonetisation may not be a solution for tackling black money or economy, which is largely held in the form of benami properties, bullion and jewellery".[9][10]
Old notes can be withdrawn up to 31st of December,2016.
Cash withdrawals from bank accounts were restricted to ₹10,000 per day and ₹20,000.
The old banknotes can be exchanged for the new ₹500 and ₹2000 banknotes over the counter of bank branches by filling up a requisition form along with a valid ID proof.
In addition a person can deposit as much money as he wants in his personal saving or current bank account.
To tackle black money in the economy.
To lower the cash circulation in the country which is directly related to corruption in our country.
To eliminate fake currency and dodgy funds which have been used by terror groups to fund terrorism in India.
The move is estimated to scoop out more than more than Rs 5 lakh crore black money from the economy.
As soon as the move was taken into action, there was a huge rush at the bank. People deposited a huge money into their accounts and the one who didn’t have account queued up for exchanging note. SBI has itself been deposited by 53000crore money in 2 days.
As a combined effect of demonetisation and US presidential election, the share market indices dropped to an around six-month low in the week following the announcement. The day after the demonetisation announcement, BSE SENSEX crashed nearly 1,689 points and NIFTY 50 plunged by over 541 points.
IT department started raiding in whereas areas to catch people with large amount of cash. If caught they were asked about the source and if the are not satisfied a penalty was charged on them.
Mainly metro cities were on prime target by IT department.
Jewellers were also raided as they were found guilty of selling gold in more than usual amount in exchange old notes. 10g of gold was sold at more than 50000 rupees
move also reportedly crippled Communist guerrilla groups (Naxalites) financing through money laundering.
Mumbai Police reported a setback to Hawala operations.
Smugglers cannot sell drugs cocaine etc as all were purchased in denomination of 500 and 1000
The Jammu and Kashmir Police reported the effect of demonetisation as reduction in stone pelting. The people who used to throw stone were usually paid. After demonetisation these people refused to accept money and hence the protest came to an end.
People having illegal money had no other options but to throw these paper after the announcement. Bags filled with these money were found near waste piles. Floating in river, sewer etc.
After having no choices people started depositing this money in various trust, NGOs, temple etc.
Businessmen Anand Mahindra (Mahindra Group), Sajjan Jindal (JSW Group), Kunal Bahl (Snapdeal and FreeCharge) also supported the move adding that it would also accelerate e-commerce.
Political leaders from all over the world praised. Singapore-based paper The Independent published an article titled "Modi does a Lee Kuan Yew to stamp out corruption in India." Lee Kuan Yew was the Singaporean Prime Minister and is considered the architect of modern Singapore.
Political leader criticized the move and said that the 'damage' is likely to be much greater than any possible benefits.[72][73] It has also been noted in the media that black money holders keep only a small fraction of their ill-gotten wealth as cash, hence targeting this cash may not be a successful strategy.[74]
Prabhat Patnaik, a former professor of economics at the Jawaharlal Nehru University, Delhi called the move 'witless' and 'anti-people'. He criticised the simple way in which black money was assumed as "a hoard of cash", saying that it would have little effect in eliminating "black activities" while "causing much hardship to common people."[75]
People who have a lot of cash, legally earned, will increase bank’s deposits by a huge margin. • This will also increase the lending activity of banks have a CRR (cash reserve ratio)
• People who have illegally earned this money may be afraid to deposit it in a bank. There are people with crores of cash, black money, earned through illegal ways, such as corruption, smuggling etc. And if they deposit this money in a bank then question will be put on them that “how did they make this in first place”.
• This will reduce the total currency circulation in the economy - leading to deflation.
Deflation increases the value of money that we have because the total money supply goes down but the commodities and things available in the market have not gone down.
People will be praised to use cashless system for payment like Paytm. These payment will be secure and reliable.
Through this the mission of digital india can get a success.
At last we’ll conclude by saying that although the path is difficult but it will benefit people in coming time. If people can stand for a day to buy a JIO sim then why cant these people stand in line for few hours and can exchange their old notes. Even a computer takes 2-3 hour to format and here I’m talking about computer with 256MB of RAM and not the modern one. So here a country is being formatted so it’ll take time. Hope for the best and think of corruption free nation with equal distribution of wealth.
