Note ban has proved to be a success
November 8, 2016 will be remembered as a watershed moment in the history of the Indian economy. This day signifies the resolve of the NDA government to cure the country from “dreaded disease of black money”. It was the people of India who demanded strong action against black money and corruption. Thus, in political terms, demonetisation has already proven to be a resounding success.
Several reputed economists have pronounced their judgments on demonetisation. Former RBI governor Raghuram Rajan has mentioned that he believed that while there might be long-term benefits, the short-term economic costs of demonetisation would outweigh them and that there were alternatives available to achieve the main goal. Manmohan Singh has estimated the cost of demonetisation to be two per cent of GDP. He even termed it as an “organised loot” and “legalised plunder”.
But Dr Singh forgets that loot was what happened in the UPA tenure in the form of 2G scam, Commonwealth Games, etc.
If we see the impact of demonetisation we can call it as India’s highest ever unearthing of black money, where 0.00011 per cent of India’s population deposited 33 per cent of total cash in the country.
One of the major impacts of demonetisation was the decisive blow to terrorism and Naxalism. We have seen stone-pelting incidents in Kashmir reduced by 75 per cent. Incidents of left-wing extremism came down by more than 20 per cent. It was due to PM Narendra Modi’s vision that this massive cleansing of India’s financial system happened, with a maze of shell companies dealing in black money and hawala transactions uncovered. In a surgical strike on shell companies, 2.24 lakh companies were struck off after 58,000 bank accounts belonging to 35,000 companies were caught transacting `17,000 crores after demonetisation. People have got multiple benefits from demonetisation like the reduced rate of interest for loans, decrease in real estate prices, increased income of urban local bodies, etc.
In the overall analysis, it would not be wrong to say that the country has moved on to a much cleaner, transparent and honest financial system.
The benefits of these may not yet be visible to some people. The next generation will view the post-November 2016 national economic development with a great sense of pride as it has provided them a fair and honest system to live in. The writer is a Delhi BJP spokesperson