On 8th Nov 2016, when Prime minister announced that existing 500 and 1000 notes no longer remain as legal tender, the whole nation was taken by surprise. Slowly, messages started flowing congratulating the prime minster for the move. Tweeter , Facebook, Whatsapp and all social media was filled with brave decision of the Government and how this was going to be a masterstroke to curb corruption and bring a new light to a common Indian. But the very next day, the struggle began. Commoners were in queues to get their money exchanged but banks were not ready. From 2 days to 18 days now, the configuration process for ATM's is still not complete and only on 24th the government has asked to stop any exchange of 500 and 1000 currency in banks. The only way remaining is to deposit this in banks and against it you will not be able to get it back in cash whole.
On Financial side, one report on very conservative side sets a no. of around 1.3 lakh crore as the cost of demonetization, still the overall impact will be difficult to ascertain, untill the exercise is complete, which may take more time then what the government has set.The larger picture as it surfacing now is that small and medium enterprises are finding it difficult to even take care of fixed cost with orders getting cancelled, some of the businesses have stopped, the economic activity is coming to a halt. How much time it will take to recover is difficult to ascertain. In For Indian finances, the decision on 8th was a sort of earthquake the after shocks of which are still being felt and uncertainty is still in air over next shock , though the devastation is not tangible , the time it will take to recover will be more than that of an earthquake itself. This is in infact a big earthquake in terms of geological location as the whole country is impacted. Overall, an impact of 1 to 1.5 % on GDP , though few experts put it at 2% will be there.
No decision is good or bad, the way the same is implemented and the final outcome will be the decider for the decision. Though it is difficult to digest that corruption will weed out and we will shine like Gold after 50 days ( Our shine will not be there at all as we will loose the business opportunity), still every indian is looking towards the Prime minister for that sunshine. The hopes are high though look like dream, but dream can be true. Already a parallel business has come up where people are exchanging old currency for 20-40% of the commission, some people are ready to put money in their accounts for minimal exchnage and Counterfeit notes surfacing for New 2000 notes and RBI coming with two versions of 500 rupees notes making it easy for Couterfeit and terrorists have been caught with new 2000 currency notes, still hope has not dwindled.
Overall it looks like that it was a master stroke meant to break the opponents but has been explained by the government to target multiple birds with one stroke. Whether we really achieve the other objectives, the main objective of the government in labelling opposition as anti national and breaking their back with the demonetization and in the meantime converting their own to white is showing.
On Financial side, one report on very conservative side sets a no. of around 1.3 lakh crore as the cost of demonetization, still the overall impact will be difficult to ascertain, untill the exercise is complete, which may take more time then what the government has set.The larger picture as it surfacing now is that small and medium enterprises are finding it difficult to even take care of fixed cost with orders getting cancelled, some of the businesses have stopped, the economic activity is coming to a halt. How much time it will take to recover is difficult to ascertain. In For Indian finances, the decision on 8th was a sort of earthquake the after shocks of which are still being felt and uncertainty is still in air over next shock , though the devastation is not tangible , the time it will take to recover will be more than that of an earthquake itself. This is in infact a big earthquake in terms of geological location as the whole country is impacted. Overall, an impact of 1 to 1.5 % on GDP , though few experts put it at 2% will be there.
No decision is good or bad, the way the same is implemented and the final outcome will be the decider for the decision. Though it is difficult to digest that corruption will weed out and we will shine like Gold after 50 days ( Our shine will not be there at all as we will loose the business opportunity), still every indian is looking towards the Prime minister for that sunshine. The hopes are high though look like dream, but dream can be true. Already a parallel business has come up where people are exchanging old currency for 20-40% of the commission, some people are ready to put money in their accounts for minimal exchnage and Counterfeit notes surfacing for New 2000 notes and RBI coming with two versions of 500 rupees notes making it easy for Couterfeit and terrorists have been caught with new 2000 currency notes, still hope has not dwindled.
Overall it looks like that it was a master stroke meant to break the opponents but has been explained by the government to target multiple birds with one stroke. Whether we really achieve the other objectives, the main objective of the government in labelling opposition as anti national and breaking their back with the demonetization and in the meantime converting their own to white is showing.
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