One year of Demonetisation
A year after note ban, the jury is still out. Has the gamble really paid off for India and Modi?
A year after note ban, the jury is still out. Has the gamble really paid off for India and Modi?
Here is the inside story, how RBI really planned demonetisationPost note ban, most retailers ready to accept cashless payments, finds CDFI-IIMB surveyNDA keen on rhetoric only, has failed in cleansing economy: M Veerappa MoilyDemonetisation ground report: Metalworking units in Moradabad still struggling Digital transactions need higher adoption to sustainGold demand at five-year low in first half of FY18The cash returned to system all right but left trail of the source: Arundhati BhattacharyaCash shortage, fear of punitive action adversely hit realty sector
The new fakes are still of poor quality. While some security features have been copied, the chemical composition is yet to be cracked.
The largest payment company Paytm reported a 1,000% increase in money added to its wallet, while MobiKwik reported a 2000% jump in the months after the note ban.
Almost 400,000 women who would earn Rs 300-800 per day by working from homes —sewing, stitching or pasting diamonds and other embellishments on fabric — have no work.
Farmers had to sell their produce at throwaway prices as consumers were forced to postpone their purchases after demonetisation.
Some businessmen said demonetisation worsened the labour shortage as migrant workers went home after manufacturing units took a hit.
Demonetisation made the Startup India and Digital India initiatives the national agenda, according to Paytm founder Vijay Shekhar Sharma.
He took on the Congress-led UPA government saying that it was all about policy paralysis whereas the present BJP-led NDA govt is all about "structural reforms".
In the long term, the impact of demonetisation will certainly be the transformation of the Indian economy into a more formal and transparent economy.
Tiruppur accounts for exports of Rs 26,000 crore a year and has 1,100 garment making units, of which about 200 are large entities with thousands of workers.
Demonetisation of high-denomination currency was among the boldest initiatives ever taken for an economy of the size of India, says Piyush Goyal.
Bhiwandi’s power loom industry used to be worth about Rs 1,200 crore annually with the total number of people employed in the units numbering anywhere up to 1 million.
Overall assets managed by the Indian mutual fund industry surged 30% to Rs 21.45 lakh crore in September 2017 from Rs 16.51 lakh cr in the year earlier.
The liquidity boost resulting from the demonetisation announcement helped banks reduce their high-cost deposits and boosting their CASA ratio.
One year on, most businesses are recovering after the demonetisation jolt.
The central bank leveraged technology and adopted a hub and spoke model for distribution of notes, post the announcement of demonetisation scheme.
The founder of ArthaKranti, the group that made a presentation to Modi about note ban, wants the existing taxation system to be replaced by a single tax.
Unified Payments Interface (UPI), which grew 150% against last month, contributed the most to the increase in digital transactions.
There was an ethical and moral rationale behind the note ban decision, he said, hitting out at Singh over his loot comments.
While a lot of us have moved to electronic payments, not many are aware of the costs are attached with it. Various fees and charges are attached with these.
50 per cent to 26.55 crore in August as compared to 13.05 per.
Was the country-wide upheaval worth it to make people adopt more digital transactions? No jury would need to deliberate for long on such a question.
"Whatever govt does, it is for betterment of country, I am a soldier and I will obey whatever decision the government will take," 80-year old Nand Lal says.
The move is aimed at driving public participation in a fight against corruption and black money in creative ways.
Jaitley, in a blog post, said it would not be wrong to say that India has moved on to a much cleaner, transparent financial system post note ban.
Singh thinks GST as well as demonetisation have hit the economy, but while GST is a good idea implemented badly, the very idea of note ban was wrong.
"In first half of 2016-17 India's imports from China stood at Rs 1. 96 lakh crore. In 2017-18, it increased to Rs 2.41 lakh crore," Singh said.
The RaboResearch economist had rightly said that first-quarter GDP growth in India would decelerate to 5.7%. He now predicts some more impact of note ban.
What we have today is evidence about how agriculture, banking, budget were affected by the move and also how it did nothing to curb the black economy or control terrorism.
According to a recent Bloomberg report India unearthed more than a billion dollars in illegal cash holdings from more than 2,00,000 shell companies post-demonetisation.
There’s no single reason for Modi’s popularity. While critics point to BJP's Hindu nationalist agenda for its success, others say note ban fortified Modi’s image.
The growth slowdown over the last year may have been accentuated by demonetisation, but it was not caused by it. It has been caused by a variety of factors.
Bankers are now reaching out to residents of this capacious village hugging Gurugam in their efforts to raise digital awareness and thwart attempts to defraud them online.
On November 8 last year, the Modi government demonetised Rs 500 and Rs 1,000 notes as part of its drive against black money, counterfeit notes and corruption.
Behind the dramatic impact of note ban was a long, carefully planned, secret operation that no one got a whiff of — except a chosen few.
India’s previous government was criticized for massive corruption scandals and a policy paralysis, helping Modi sweep to power in 2014 with the biggest mandate in three decades.
With over 99% of the demonetised Rs 500 and Rs 1,000 notes back in the banking system, the government is being questioned whether the entire exercise flushed out any black money at all.
One year into demonetisation, here's what worked and what didn't