Prime Minister Narendra Modi had taken a bold step giving what seemed like a shock to the entire nation when at the strike of 12 at midnight, he made one of the most historical announcements ever for the Indian economy.
8 Nov 2016, was the day when he scraped the Indian currency notes of 1000 and 500. The entire nation was taken aback, the opposition heavily criticised the decision of the Prime Minister and termed it as the Modi made disaster, while those in favour of Modi were arguing that it was the right decision taken and its results will be seen in the long run.
Today, 8th of Nov 2017 marked the first anniversary of demonetization, the entire nation including the economic experts are debating whether the decision of Modi is a pain or a gain for India. While BJP is celebrating the first anniversary throughout the nation, the opposition is loathing it and is observing the day as the ‘Black Day’ across India.
Addressing the Nation on 8 Nov, Prime Minister Narendra Modi termed the “drive as a “historic and multi-dimensional success, and said 125 crore people fought the decisive battle against black money and corruption.” He thanked the Indians for having trust in him and extending their support to the move to eradicate black money from the nation.
I bow to the people of India for steadfastly supporting the several measures taken by the Government to eradicate corruption and black money. #AntiBlackMoneyDay
— Narendra Modi (@narendramodi) November 8, 2017
Trying to list down the benefits of demonetization, through a short film, BJP said that at a time when India was asking for mercy and had lost all hope, fighting corruption and black money, Narendra Modi came as the life savior and took the responsibility of a corruption free India into his hands. From the very first day, the Modi government had declared its fight against black money and had started strategizing to eradicate it completely from India.
On 8 Nov 2016, Modi took a decision which was first of its kind, after the independence of India, it was the first time a leader had dared to take such a bold step. He announced demonetization for the poor and with the honest citizens of India. The entire nation also came forward to support Modi, targeting the evil, just like Arjun aimed at the fisheye. They also ignored a few troubles they had to face while fighting against the black money.
Modi said that the poor and the honest were not bothered with the note ban, they had faith that an honest government was fighting for them but the rich and those who possed the black money became restless and cursed the decision of Modi.
According to the figures given by the government, around 15.28 lakh crore money came back to the banks and even the black money returned. It is because of the historic move of note ban, that the agencies have the entire details of the companies and people who were dealing with black money. Currently, an amount around 3.68 lakh crore along with 23 lakh bank accounts are under suspicion and strict surveillance is being carried out.
According to the surveys done after the note ban, it was found out that out of the entire population of India, 0.00011% of the people had deposited around 33% of the total cash circulating in India, which was approximate, 5 lakh crore.
Dmonetization was a tight slap to the fundings of terrorism and Naxalites. In the Indian economy, the ratio of the high currency notes was rapidly rising, which were being used in illegal activities like, funding the terrorists, hawala, and corruption. After demonetization, currently, around 12 lakh crore high-value currency notes are in circulation in India. If it had not been for the note ban, then this figure would have risen to around 18 lakh crore. Due to demonetization around 6 lakh crore, high-value currency notes have been decreased in the circulation cycle.
Supporting the move of note ban, another benefit was listed down that since the currency notes of 1000 and 500 were banned in India, suddenly the stone pelting incidents in Kashmir dropped down by 75% and there was a decrease in the Naxalite activities also by 20%. The business of counterfeit money and drugs also suffered heavy losses.
The Modi government carried out a surgical strike against the shell companies and shut down around 2.24 lakh companies. During the strike and investigations, it was also revealed that there were around 100 companies registered under one address only and there were around 100 bank accounts held under the name of a single company.
Not just the terrorist findings and shell companies were targeted but also around 1626 crore benami properties also fell into the trap of this cyclone. The poor got their rights and better job opportunities. Around 50 lakh new bank accounts were opened for the workers. Modi government has claimed that after demonetization, the poor are not only enjoying their rights but have also got social security. Around 1.01 crore workers were connected to the provident fund. ESIC registered around 1.03 crore workers.
Demonetization has also immensely increased the number of taxpayers in the economic system of India. Around 84.21 lakh new taxpayers were seen after the note ban and the number of online return filing people crossed 3 crores. the tax compliance and the money accumulated after the number of people increased to file the taxes, was used in different sectors in India for the development public welfare schemes and infrastructure.
This move of Prime Minister Narendra Modi was also aimed at making India a cashless economy. After demonetization, the digital transaction increased from 87 crores to 138 crores. The Modi government has claimed that after the note ban the common people enjoyed multiple benefits. As the money deposited in the banks kept increasing, the interest rates of the financial institutions fell down and it directly benefitted the common man of India. The property rates also fell down and it became easier for the common man to buy their own houses.
Another benefit listed under the demonetizations is that after the note ban the income of the municipal corporations increased by three times. The short film released by the Modi government on the benefits of demonetizations said that every Indian family, every poor, every village, the dreams and aspirations of the youth and all 125 hundred crore citizens have fought this fight against corruption and black money with rigidity, self-confidence and unbreakable trust in the Modi government and India has definitely won this war.
Other than Modi the CBI also listed down some figures post demonetization saying that it registered 77 cases and seven preliminary related to the exchange of demonetized currency in various departments/agencies including banks, post offices, railways, insurance companies. The CBI in a press release said that approximately around Rs 395.19 crore were involved in these cases. The agency also arrested 21 public servants and 26 private persons out of 307 accused found to be involved in these cases.
Defence Minister Nirmala Sitharaman also in her statement to the press said that the biggest achievement if demonetization is that “Terrorism has been badly hit and the stone pelters, which were in thousands, have reduced because their cash flow has been cut.”
Union Minister Ravi Shankar Prasad said that post note ban flesh trade and trafficking of women has substantially reduced in the nation.
Finance Minister, Arun Jaitley called demonetisation a ‘watershed moment for the Indian economy’. He added that the ‘anti-black money drive’ was a moral step.
Former Defence Minister Manohar Parrikar said that demonetisation has struck a blow to anti-India forces and empowered the poorest of poor through an increase in financial inclusion and formalisation of the economy.
#Demonetisation was a reformist measure to weed out black money, strengthen our economy, & establish good governance. #AntiBlackMoneyDay
— Manohar Parrikar Memorial (@manoharparrikar) November 8, 2017
Through increase in financial inclusion & formalisation of our economy, #Demonetisation empowered the poorest of poor. #AntiBlackMoneyDay
— Manohar Parrikar Memorial (@manoharparrikar) November 8, 2017
Terrorism & naxalism thrives on unaccounted cash & black money. #Demonetisation has struck a blow to anti-India forces. #AntiBlackMoneyDay
— Manohar Parrikar Memorial (@manoharparrikar) November 8, 2017
Union Information and Broadcasting Minister Smriti Irani supporting the move of Narendra Modi today flagged off a ‘Digital Rath’ as part of an initiative to create awareness among people regarding cashless transactions in different cities.
While some figures and surveys say that people even after one year are backing Modi and some say that the note ban decision of Modi has gone against him. As per the survey conducted by the economic times, In response to the question, ‘Overall, how do you rate demonetisation?’, 38% said it was a success. 30% said it had mixed results. Only 32% said it was a failure. While, on the question that ‘how do you overall rate demonetization, only 26% thought demonetisation damaged the economy for longer term. 32% said it made the economy more transparent while 42% said it made the economy more transparent but with some collateral damage.
On one hand, while the Modi government is claiming that the bold step taken by the Prime Minister to ban the old currency notes of 1000 and 500 has been beneficial for the people and only the ones guilty of dealing with black money has suffered. The opposition is highly condemning the step and has termed it as a Modi made disaster.
Congress had declared that it will observe 8 Nov as the black day in throughout India and Congress Vice President Rahul Gandhi will also lead a candle light vigil as a part of the protest in Surat, Gujarat. The Congress party counter attacked the claim of Modi that the move of demonetization was for the poor. The opposition said that “Demonetisation was for the poor?
The families of these people who brutally lost their lives beg to differ.”
The opposition party alleged that the announcement made by the Prime Minister at the midnight literally unleashed chaos on the streets of India and more than 100 people were killed in only 45 days. Rahul Gandhi said that the Prime Minister failed to grasp the most basic and fundamental concept of the Indian economy that all cash is not black and all black is not cash. Rahul Gandhi tweeted that “demonetization is a tragedy we stand with millions of honest Indians, whose lives & livelihoods were destroyed by PM’s thoughtless act.”
Demonetisation is a tragedy. We stand with millions of honest Indians, whose lives & livelihoods were destroyed by PM’s thoughtless act.
— Rahul Gandhi (@RahulGandhi) November 8, 2017
Shashi Tharoor, the chairman of the Parliamentary standing committee on external affairs in India’s Lok Sabha changed his social accounts display picture to black, supporting the Congress in observing the first anniversary of note ban as ‘black day’.
The reasons my DP is black today, the 1st anniversary of the #DeMoDisaster: https://t.co/HydB8e3CAl #BJPMoneyLaunderingDay #Nov8BlackDay
— Shashi Tharoor (@ShashiTharoor) November 8, 2017
Former Prime Minister Manmohan Singh said that the objectives stated for the move taken by the incumbent Prime Minister have not been achieved. While addressing the traders and businessmen in Ahmedabad he said that “Black money and tax evasion are a menace that needs to be tackled, but note ban was not the solution. It had been suggested many times in the past as well, but as a responsible government, we never took such a drastic measure. Nowhere in the world has any nation taken such a drastic step that took away 86 percent of the legal tender…The stated objectives of note ban have not been met.”
The opposition parties all over India had observed the first anniversary of demonetization as the black day on the theme of ‘Bhugat raha hai Bharat’ (the India is suffering). The Congress leaders were also quoted saying that the name of Narendra Modi will go down in India’s history alongside Muhammad Bin Tughlak for the “gross misadventure” of demonetization that wreaked havoc with India’s economy. They also said that the people of India will never forgive Modi for his decision.
Ghulam Nabi Azad, Opposition Leader, Rajya Sabha a few days back had stated that “One can say this is the scam of the century. Eighteen political parties have decided to hold protests in every state in their capacity against the government’s decision which caused hardship to the people. Never ever in the world have people died because of a government policy.”
TMC Chief and the Chief Minister of West Bengal, Mamata Banerjee, said that demonetization was a disaster and had urged the social media users change their profile pictures to a black square on 8 November to protest the note ban. She herself also changed her display picture for all the social media account to black square. Trinamool Congress leader Derek O’Brien said his party will observe 8 Nov the day as ‘Kalo Dibas’ (the black day).
In his statemnet to the press, the TMC leader had said that “The history of modern India will remember the ‘scam’ which took place on 8 November. We had raised a number of questions and our doubts regarding the policy but the government could not answer or erase our doubts.”
Former Finance Minister and a senior Congress leader, P Chidumburum said that “millions of people “suffered” and no one can deny that lives and jobs were lost due to the call.” He also attacked the Modi government in a string of tweets.
Can any one deny lives were lost, small businesses closed and jobs were lost?
— P. Chidambaram (@PChidambaram_IN) November 8, 2017
On demonetisation Black Day read real-life stories, say a prayer
for the millions who suffered.— P. Chidambaram (@PChidambaram_IN) November 8, 2017
Counter attacking the govenment on the claim that the most of the black money has returned to the bank, he informed that Cash with public Rs 15 lakh crore and increasing, will soon reach Nov 2016 level of Rs 17 lakh crore. Alleging the government on on interfering in the matters of the RBI he said that it is the deision on the RBI and not the government that how much cash , money supply there should be. He also stated that “that artificial reduction of cash in circulation is one of the reasons for lower demand and lower growth.”
In interest of transparency, Govt/RBI should release RBI Board's agenda, background note and Dr Raghuram Rajan's note.
— P. Chidambaram (@PChidambaram_IN) November 8, 2017
If govt is confident of its decision, why does it fear releasing these documents?
— P. Chidambaram (@PChidambaram_IN) November 8, 2017
Some of the arguments differ edwith the claims of the goverment saying that demonetization had benifitted the people. The government claimed that number of tax assesses has increased sharply but at the same time the additional tax collected has not been provided. As per the reprts till Sep, growth in direct tax collections is same as before.
The Government also stated hat post demonetizations digital transactions has considerably increased. but few argued that increase in oline transactions was very natural as there was noother base left and the people had no option but to choose that. Thechose digital transaction by force and not by chioce. Also, since almost all cash came back for exchange during the two months as per RBI data, evidently there was not much black money stashed in cash except at the margin.
Despite these arguments, Congress Vice President Rahul Gandhi stated that Prime Minister Narendra Modi’s step has “only wiped out 2% of the country’s GDP, destroyed the informal labour sector and destroyed many SMEs. It has ruined the lives of millions of hard-working Indians.”
While Modi government argued that tit was neccesary to take the move of note ban to make the money of the anti-national and anti-social elements worthless. But the experts couter stated that as per the data ariround 98.7% of the Rs 15.44 lakh crore worth of demonetised currency came back into bank accounts, this means that even the illegitimate money ended up becoming legitimate.
According to a survey conducted nationwide, revealed that 63 percent respondents said that “they witnessed people in serious problems due to the government’s sudden move of note ban.” As per the reports published by the media, a majority of the respondents (55 percent vs 26.6 percent) disagreed that the move will wipe out black money forever. Also, 48.2 percent did not believe that demonetisation would have any impact on terror attacks while only 20 percent believed the common man would benefit from the move.
During the survey, more than 65 percent complained that the demonetiation had only affected the middle caclass and the poor, while the rich were unmoved. They said that they did not see any politician or a rich person standing in any bank or ATM queue.
The claim that the terrorist funding has been curbed and post not ban, stone pelting incidents have considerably come down was also attackeg bu arguments,. According to the experts, though it is right tht=at the terrorist incidents decreased in Kashmirbut they were soon ssen back in power as soon as the rotationof the new currency notes returned to the system.
The debate on whether demonetization was a masterstroke of Narendra Modi in favour of the nation or was it a failure can go on forever, without reaching to any meaningful conclusion. Those in favour of BJP and Modi, will never accept that it was a failure and had negatively impacted the lives, jobs and businesses of many. Those against BJP and Modi will never accept that the drive was to bring back all the black money, put a stop to terror funding and its results will definately be benificial for the Indian economy in the long run.
Rather than being a matter keeping in mind the welfare of the citizens of India, it has becoma a political matter to be used against each other by the political leaders.