Devastating Demonetization

Dear Sir,

The nation was taken by surprise six years ago when the government head abruptly announced demonetization. It was presented as a bold initiative to find hidden funds, lessen the use of fake money, and stop the funding of terrorism. But it ended up becoming India’s biggest economic catastrophe. Many people have lost their jobs and gone bankrupt as a result, and the entire country is still feeling the impacts of it. The note ban is perhaps the worst economic decision India has made since becoming independence in terms of benefits. None of the goals it was designed to achieve have been met. Instead, it caused enormous suffering to the populace, devastated the informal economy, ruined a number of businesses, and made millions of people unemployed. Ironically, money is once again king. Although the cash levels fell sharply after demonetization, they quickly rose to record-high levels. The government was completely mistaken to believe that outlawing high-value currencies overnight would deter people from using cash. The cash held by the public climbed to Rs. 30.88 lakh crore as of October 21 according to the most recent data on the money supply from the RBI, which has been widely covered in the media.

 According to data from the reserve bank, on November 4, 2016, there were 17.7 lakh crore rupees in circulation. To assert that demonetization had no negative effects on GDP growth would be false. In the year following the demonetization, there was an about Rs. 2 lakh crore loss in economic production. At least now, the government is required to apologize to the country and admit that the note ban was a mistake. The economy is in shambles as a result of the misguided demonetization, which has also affected employment.

Shanti Parihar
shanti2000@gmail.com