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India Demonitization Nov 2016- PROS & CONS
This document summarizes the impacts and debates around India's demonetization policy announced in November 2016. It discusses both the perceived benefits such as curbing black money and terrorism financing, as well as significant short-term costs including inconvenience, job losses, and impact on farmers and daily wage earners. While the policy aims for long-term goals of a cashless economy and banking sector reforms, the document argues the implementation faced hurdles due to India's scale and lack of digital infrastructure, and that other enforcement measures could have been pursued instead of or in addition to note ban.
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India Demonitization Nov 2016- PROS & CONS
- 1. DEMONITIZATION Good|Bad |Ugly Sunil Saha INDIAN Neitheran AAP-Tard or BHAKT
- 3. OBJECTIVES • StopPAK cash-fundedterrorism –Kashmir – Bangladesh – Nepal Routed Money • Reforms: BankingSector Needs • Move towards Cashless Economy • Curb BlackMoney
- 4. AGENDA • TheGOOD • TheBAD •Who„sAffected:TheINCONVENIENCE • Who„sAffected:HUGELY • OperationalStrategies–UNEXPLAINEDbyGOVT. • CommonDebatesFacts • NOTSO COMMON : FAQs • AdvantageBJP : WHY? • WhatelsecouldhavebeenDone? • FUNNYsideofit
- 5. TheGOOD Let„ssee what„s beenGOOD • 10 Lac CroreOf Cash Expected to Flow In Banks till Dec30, 2016 • Banks can become stronger to give loans • InterestRates Marginally Down • 92% app users supported the Movei.e. 5 lac people i.e. .0005 % of Population VOTED in first 30 Hours
- 6. TheGOOD Cont. • NO.1Pak CASH Sponsored Kashmiri Terrorin Decline • FakeNOTES will be Curbed • Incometax payers will increase from 1.5% • Unaccounted income will come in with newTAX Reforms • Banks will be saved
- 8. Who„sAffected JustA LittleInconvenience - Top5%of IndianPopulation – who lives/Or can live off PAYTM FREECHARGEetc - 150 mnPAYTM Ids by2016 end - 7mn Daily Trxn worth 120 Cr - PAYTMtransactions higherthan all banks put together in NOV 2016.
- 10. What„s Bad WHO„s AFFECTED: Oh My GOD! • 51 Deaths Reported • FamilieswithILLNESSand Marriage • DailyWages Earners– WORSTHIT • FARMERSWorst Hit: Rabi Season Produce at risk – wheat,barley,oats(cereals), chickpea/gram(pulses), linseed, mustard(oilseeds) • ExpectedLosses : 50000 cr to 3 laccrore
- 12. Who„sAFFECTED: HowMuch? • 20% ofIndian Population Standing in BANKS and ATMS – i.e. 25 Crorein 1,30,000 i.e. 2000 people in queueper ATM • Avg3-4 Days of Work Loss for India as a whole • No. of ATMS : 2,20,000 • Working ATMs: 1,30,000 • Callibrated ATMsTime Taken = 8000 ATMS per day • Cooperative Banks devoid of CASH
- 14. OPERATIONAL STRATEGIES HURDLES Understandably-India Is Just tooHUGE • Onground – 1.55 Post Offices • JanDhanYojana- 75 Cr Total BankAccounts – On Groundexecution is Question Mark • WhyRBIEx Governor Mr. RAM was not consulted • WhyNOTE Sizes were changed – New500 and 2000 Rs Size should have beensame for Operational Ease COULD HAVE BEEN BETTER
- 16. OPERATIONAL STRATEGIES Unexplained • FrequentChangesin Announcements 2500 Cash Deposit> 2000 Cash Deposit> 4500 Cash Deposit and again> 2500 Cash Deposit • PetrolPump- Hosp. – Medical Shops miscommunication • Cash RUSH of Rs.24000 • Marriage Families Withdrawal Rate Issues COULD HAVE BEEN BETTER
- 17. COMMONDEBATE FACTS • 85%of Indian CASH was in 500-1000 RupeeNotes • 99.9% of Black moneyis with 0.1% of population • Differentiation of UNACCOUNTED MONEY & BLACK MONEY
- 18. NOT So FAQs 1.Infra: INTERNET SPEED • CASHLESSECONOMY : Without INTERNET Speed • India has 35% Internet Penetration on paper (It doesn„t count multiple connections) • 1.5% 4G usersof 46 Cr Internet Users • 26Cr still using 2G
- 19. • 20% IndianMales ; 50% of Indian Female in Rural India are illiterate • How to train people E BANKING/ WALLET? NOTSo FAQs 2. Infra:Mob InternetTraining
- 20. BJP„s Political Mileage •UP elections will be cleaner than ever • All major parties are requested toshow • HoweverQuestions remain on last 4 months of LANDPurchases onInflated rates • BJPquestioned by Opposition which has lost all respect and credibility
- 21. What ELSE Couldhave been Done? IfNot NOTE BAN • Hire 5000 Judges (As req.)by Chief Justice • RunIT Raids across India for 5000000 people who have maximum Black Money – Majority- Builders and Politicians – AndFast Trackcourtto punishit
- 22. FUNNY But TRUE •People at FIRST SUPPORTED Evenafter Inconvenience: WHY? • Becauseall are HOPING “THERICH ARE SUFFERING”
- 23. INDIAN JUGAAD • 1stWEEK : Deposit my 4500 and take home 500 • Bookmychotu.com : OUTSOURCE- who stoodin line for Banks and ATMs • 200% tax and Legal fears – People burnt CASH and CUT it to spreadinto Fields • Giveme 500, take Rs.400 • 50% white money by agents
- 24.