(Written and compiled by Prem Ranjan Singh, MNNIT Allahabad)
And it was also proposed that people can be allowed to exchange such notes for a maximum amount of Rs 10,000 per individual. According to experts, this will help in solving the problem of corruption, as it will be difficult to hide smaller notes in big quantity. And also those who are holding lakhs and crores of these currencies, will be at the loosing end as their money will become redundant. (Since they will be able to convert only Rs 10,000) .
Incidentally, One of the religious guru Baba Ramdev was also demanding for such measures for a long time, and had even advised PM and President on this matter..
I have tried to put counter argument against the above view below...........
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Demonetization
Demonetization is desirable but very inconvenient exercise for many practical reasons.
1. It will give sudden shock to the economy because as per estimates, black money circulation is in our beloved country is around 40% of GDP. ( Means 40 % of $ 1.5 trillion)
1. Just think, what will happen when you would visit the ATM to withdraw money.( Count the notes of say Rs 50 for Rs 5000 withdrawal ;) )
2. Think about the size of your wallet especially when you live in costly cities like Mumbai/Pune/Blore and Delhi.
3. Poor and middle class people will be affected a lot due to inconvenience and lack of information. And also our population size is satirically very small.
4. Many people will take advantage of the situation by bribing others (say poor) for conversion of money. Money will simply be distributed among poor for conversion and then it will be regained after the conversion. And since we have large no of population living in poverty, it will be difficult to monitor such frauds, which will be very obvious and at a very large scale. This fraud will happen in a very organized manner through fraudulent NGOs.
you can't ask people that where the hell did you get (say rs 10,000) this money from..
We Indians are known for Jugad.....
In my view,it's better to look for better future rather than digging too much into the past.
Although it is an emotional issue, but I feel amnesty is a better and practical way of dealing with the past. Charge some taxes on these money and make them legal. And also make strong provisions for stringent punishment for future tax frauds.
2nd option is.. Government can stop printing higher denomination currency but they should not stop circulation of old stock. By this way, in the long run, we might be able to mitigate the impact....
Stopping it outright is an emotional rhetoric.
1. Just think, what will happen when you would visit the ATM to withdraw money.( Count the notes of say Rs 50 for Rs 5000 withdrawal ;) )
2. Think about the size of your wallet especially when you live in costly cities like Mumbai/Pune/Blore and Delhi.
3. Poor and middle class people will be affected a lot due to inconvenience and lack of information. And also our population size is satirically very small.
4. Many people will take advantage of the situation by bribing others (say poor) for conversion of money. Money will simply be distributed among poor for conversion and then it will be regained after the conversion. And since we have large no of population living in poverty, it will be difficult to monitor such frauds, which will be very obvious and at a very large scale. This fraud will happen in a very organized manner through fraudulent NGOs.
you can't ask people that where the hell did you get (say rs 10,000) this money from..
We Indians are known for Jugad.....
In my view,it's better to look for better future rather than digging too much into the past.
Although it is an emotional issue, but I feel amnesty is a better and practical way of dealing with the past. Charge some taxes on these money and make them legal. And also make strong provisions for stringent punishment for future tax frauds.
2nd option is.. Government can stop printing higher denomination currency but they should not stop circulation of old stock. By this way, in the long run, we might be able to mitigate the impact....
Stopping it outright is an emotional rhetoric.
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