Skip to main content

Indian Rupee Demonetisation: Why It Cannot End Corruption Or Even Black Money

Rupee Demonetisation

It was November 8, when Prime Minister Narendra Modi, in a dramatic announcement, decided to scrap or demonetise two high-value Indian currency of the denomination of ₹500 and ₹1000. It means 85% of currency in circulation will no longer be a legal tender. All that precious notes have been converted into wastepaper overnight. It became the biggest talking point in every Indian household  from Kashmir to Kanyakumari and from Kutch to Arunachal Pradesh. After all, in a country where 98% of all transactions are conducted in cash, it was a big jolt.

Demonetisation is usually associated with degrading economies and hyperinflation and often done by military dictatorships. It was surprising that a popular and democratically elected prime minister of a booming economy has resorted to demonetisation.

Black money is the money held by people that have evaded taxation. It is illegal hoarding of unaccounted money which tends to exacerbate inequality because the biggest evasions occur at the top of the income spectrum. It deprives the government of money to spend on infrastructure and public services like healthcare and education.

India has a huge amount of black money the "kala dhan". But, the bulk of this kala dhan is not in cash form but kept in gold, real estate and overseas bank accounts. Thus, demonetisation is not going to impact the major share of Indian black wealth.

There is no doubt that the government's dragnet will catch some illicit cash. Some people will surrender their black money and pay a penalty; others will destroy part of their hoarded cash in order not to draw attention to their businesses.

The collateral damage from this move has been huge. It has caused massive unrest in the country. Though people have accepted this inconvenience without a single complaint, in hope of a better corruption-free India, their plight cannot be ignored. While the impact of demonetisation can be seen among people from almost every field, in one form or another. But, the daily bread-earners and those without easy access to banks or post offices are the biggest sufferers. From Agriculture to Industry, the damage has been caused to every business which runs only on cash. Demonetisation is mostly hurting people that aren't its intended targets.

Corruption has nothing to do with currency, cash or banking. It requires changing institutions and, most importantly, mindsets. To weed out black money, more comprehensive reform is needed. Without tackling the reasons for black wealth, just demonetisation cannot make India successful to get rid of corruption and black money.

Demonetisation, as it appears, is one of India's biggest economic blunders, but it could have been a great achievement had it been implemented with planning.


Also Read: Cashless Economy: The Key To A Reform

Comments

Popular posts from this blog

Sanjay Dutt Hero Or Villain? A Review Of Sanju Baba’s Journey As Both

The Sanjay Dutt biopic “Sanju” was released on 29th of June made by one of the best filmmakers of the B-town, Rajkumar Hirani. It was marketed as an “unbelievably true story”. Indeed Dutt’s journey is unbelievable. However, there have been many unbelievable personalities too such as Dawood or Osama. Sorry for comparing Dutt with Don and Terrorist. The drugs, booze, women, and AK 56 make Sanju a largely negative character in the real world. Not his fault, according to the film.


Some people say Sanjay Dutt doesn’t deserve a biopic as there are many “good” people, with their “good” work, that go unnoticed. The argument over whether Dutt deserves a biopic or not is inane. It’s like saying Dhoni’s biopic should have been made after his retirement. The truth is, biopics are made on interesting people, not the good ones, especially if it is of commercial in nature. If that interesting people is a negative character, it gets more publicity. Also, a “fictional” biopic cannot be real. Be it Da…

Making A Difference — Indian Media And Ravish Kumar

Today's Bulletin: Priya Prakash Varrier’s killing wink, Taimur’s daily schedule, 'Rashtramata' Padmavati, Donald Trump tweets, Different types of jihad - love jihad, hate jihad, cow jihad, North Korea’s ‘mental dictator’ Kim Jong Un's preparation for a nuclear war, and last, but not the least —An esteemed panel of 'alleged' experts and politicians engaging in an ‘alleged’ debate.
If you are a consumer of Indian media, particularly the news channels, you might have got the idea of what my opening words are and where I’m trying to point it. If you think, all mediawallahs (media personnel) are same, or that these are really important topics worthy of your time, you need to think again.

There is a 'proven' left-wing terrorist, and an atheist, perhaps, NDTV journo named Ravish Kumar who is different. The non-Hindi Indian states might not have heard his name. He is not interested in covering ‘big stories’, no loud debates, no panel of Pakistani alleged ‘defe…

The Sensational Case of Salman Khan and Black Bucks, After Two Decades Justice Served?

Before beginning, I would like to reiterate that Salman Khan is just a cinema star, nothing more nothing less. So leave celebrity worship aside and try to be pragmatic.

Salman Khan’s past was nowhere similar to his modern-day superhit films. Infamously known as the bad boy of Bollywood, he has been directly involved in criminal cases of pretty grave nature. Hit-and-run case, in which he allegedly under the influence of alcohol ran his car on the footpath in which one person was killed and four got injured. In that case, first his driver was made a scapegoat but a little while later, things became murky the result of which Khan was acquitted by the Mumbai HC in 2015. His relationship with Aishwarya Rai (Bachchan) fetched an excellent TRPs to our media, first with and rumours about their relationship, then with confirmed rumours, and even after the break-up, when former miss world accused him of harassing her. Black Bucks/Chinkara poaching case, about which this post is all about, and,…

The Triple Talaq Bill: A Final Step To Settle Gender Justice Debate Among Muslims

I’ve written a post earlier on the issue of triple talaq in June last year when the government opposed that in the Supreme Court. The SC held that talaq-e-biddat or instant triple talaq is unconstitutional, arbitrary and thus declared it void. Now, the legislation is being done with the continuation of the judicial declaration, with a triple talaq bill already been passed in the Lok Sabha and waiting to be passed in the Rajya Sabha. The bill shall provide a legal right to the Muslim women against this practice and make it a "criminal and non-bailable offence".

But, some Islamic scholars and ‘secular’ politicians are questioning the authority of the Parliament. Isn’t it the Legislature that is formally authorised to initiate and bring reform in the society? Triple talaq is an unjust practice that has been carried out in independent India which is shameful. This practice has been even discontinued in many sharia abiding countries. The parliament has only initiated the legisla…

The Padmavaat Circus — A Brief Summary

OVER THE LAST FEW MONTHS, the nation has witnessed a bizarre issue. We have been battling with the question of whether a film should be allowed to screen or not. It is definitely a matter of concern if a movie is not allowed to be showcased, and even more if the makers and artists receive threats. But, don't you think we gave it more importance than what it really deserved? It certainly was not worthy of the space for prime time debates every single day as if it is the “only” thing India is concerned about.


From the beginning, I was appalled by the duration of time Padmavati remain in the news. After the news, they do a stupid TV debate about the same. We then also saw TV anchors giving a "no-objection certificate" to the movie happily. It was at a time when the film had not been even sent to the CBFC. But, there was a journalist/anchor who was showing the educational crisis in the country instead of a frivolous debate of whether Padmavati to be allowed to release or not.…

The Story Of World's Longest Human Chain - Bihar Manav Shrinkhla

On January 21, 2018, (the people of) Bihar assembled together to form a human chain, the manav shrinkhla. It was the world's longest human chain ever formed. Last year, exactly on the same date, Bihar had formed a similar human chain to show their firm stand against alcoholism. At that moment, it was also claimed and publicized as the largest human chain ever formed in the world. But this year, it has been covered only as a news and not discussed widely on the Op-ed page. So, probably I’m filling the spaces our mediawallahs has left empty.

For your information, a human chain is a demonstration by the masses to show political solidarity, for or against a cause, in which people link arms with one another to form a large chain. Usually, the organizers of such event put an exaggerated data to the public in order to show how genuine their concern is. Still, it's a universal method to win support and encouragement of the public.
We can say that Bihar government has actually celebrat…