What do you think about Demonetization ?

Just Rs 10,720 crore of Rs 500 and Rs 1,000 notes failed to come back to the RBI, as against expectations that over Rs 3 lakh crore of black money would not return to the banking system.

Over 21 months after Rs 500 and Rs 1,000 notes were withdrawn from circulation on November 8, 2016, the Reserve Bank of India (RBI) on Wednesday said that nearly all of that money has returned to the banking system.

The RBI has received Rs 15.31 lakh crore of Rs 500 and Rs 1,000 notes, or 99.3 per cent of the Rs 15.417 lakh crore worth of notes which were in circulation as on November 8, 2016, when the government announced demonetisation, the central bank said in its annual report for 2017-18 released on Wednesday.

This means that just Rs 10,720 crore of Rs 500 and Rs 1,000 notes failed to come back to the RBI, as against expectations that over Rs 3 lakh crore of black money would not return to the banking system.

The sudden withdrawal of notes in 2016 had created a liquidity shortage, with long queues outside banks and people undergoing immense hardship across the country

also roiled the economy, with demand falling, businesses facing a crisis, and GDP growth declining close to 1.5 per cent. Many small units were hit hard, with many reporting huge losses even after nine months.

The Reserve Bank of India has revealed in its annual report that Rs 15.28 lakh crore, or 99 per cent of the Rs 15.44 lakh crore scrapped currency notes, came back into the system after demonetisation

Only Rs 16,000 crore of demonetised currency was not deposited with banks, according to data in the Reserve Bank of India's annual report. The report, which has come after a delay of nearly two months as the central bank was still collating the data on the scrapped currency, also says that only about 89 million units of the banned Rs 1,000 notes, worth Rs 8,900 crore, didn’t come back into the system.

Negative Effects of Demonetisation

Demonetisation will pull down India’s 2016-17 GDP by 1%, says the IMF

Cash Shortage
8 million workers unpaid due to shortage of cash
ATMs were running out of cash after a few hours of being functional
Printing of new substitute currency notes was unplanned

Stock market indices dropped to an around six-month low in the week following the announcement

Over 100 lives lost due to the chaos that caused while exchanging demonetised notes.

Transactions in the Indian agriculture sector are heavily dependent on cash

Farmers and their unions conducted protest rallies in Gujarat, Amritsar and Muzaffarnagar against the demonetisation

Notably, that was a time of kharif harvest and start of rabi sowing

25-50% Sales have dropped across markets with occurrences of dumping

Within first four days, the banking system has handled about 180 million transactions.

No compensation is paid to the bankers for working overtime during the chaos

ATMs were not calibrated to the dimensions of the new currency

Public Sector Banks may continue to register highest GNPA(Gross Non Performing Asset) ratio

RBI’s Financial Stability Report (FSR)- GNPA ratio may increase to 12.5 per cent in March 2017 and then to 12.9 per cent in March 2018

A demonetization is an act of removing the legal status of currency as “Legal Tender”. Means old notes or even coins must be retired and replaced with new ones or completely new currency can be introduced like Rs. 2000 note which was not available earlier

On 8th November, PM Modi’s announcement was the breaking news across India. Rs.500 and Rs. 1000 notes (currency) are made illegal from a stroke of midnight.

One might think, why it’s been done? Indian government’s goal was to remove all counterfeit (fake) currency from the market which is used in tax evasion, corruption and even in funding terrorist activities. These two currency notes are the most used currency in the Indian market, it had 86% share in the market.

Easy for government to track all the transactions which takes place in the economy. Start-ups like paytm, freecharge will boom. This will have a ripple effect in the form of incentives for new startups to spring up

Cashless means more transparency. More transparency means more investor confidence in the economy. So, it will be an incentive for foreign investors. So higher GDP growth

Government cannot impose any restrictions on the amount of money a person can withdraw from his account as per section 26(2) of the RBI ACT1934. so it's illegal.Poor preparation by the government for the biggest currency clean up of India ever. So many people died .Some district cooperative banks are not accepting the demonetised currency.

Indeed it was a bold step which has been taken by indian goverment.But the preparation was not up to the mark .Many people have died for standing in queue in front of ATM boots and banks.The demonetization had gave a bad impact on the Venezuela , but the government is being stood by the public .So , the whole credit is goes to our tenants and government.

At this moment people of India have happily accepted the demonetization(at least it seems that way) but only after the results of UP election it will be decided that it was a masterstroke that worked well or it just backfired ?And its surely gonna affect our economy for couple of quarters in 2017.

He has not travelled across India to see the impact of the plan. He has to with the people at the very most crucial time who does not know how to survive without money and does not know when they get money.

But PM goes to foreign trip. I am not condemning him for his Japan trip. But he should take the step when he can spend considerable time in India

When we Indians have sacrificed many people for implementing this plan PM does not say a word on this on humanity ground