India’s largest survey on Demonetisation of Rs. 500 & Rs. 1000 notes

46,042 Views Updated: 03 Feb 2016
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India’s largest survey on Demonetisation of Rs. 500 & Rs. 1000 notes

Take part and see the result of India’s largest non-partisan/non-government survey on demonetisation.

Demonetisation of Rs. 500 & Rs. 1000 notes on 08-Nov-2016 is one of the largest economic experiments in the history of India. Any such bold move is likely to have its pros and cons.

See what India thinks on various issues related to demonetization and its future impact on our economy.

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1. Black Money

Pros

• In real estate, cash component (black money) can range from 20-80%. People holding large amount of real estate will lose major part of their illegitimate wealth.

• Property will become affordable to commoners.


Cons

• Likely decline in property prices will also negatively hurt law abiding people who always paid taxes and bought property with their hard earned money.

• Deflation in real estate will discourage new projects and impede infrastructure development.

• Interest rates are likely to go down and it will reduce the incentive to save.

Will it curb black money?

2. Corruption

Pros

• Since most bribes are paid in cash, corruption will decline within government & politics .

• It will provide level playing field to people adopting ethical businesses practices. 


Cons

• Government officials often justified taking bribes because of low salaries in government jobs. Without extra income in form of bribes they now may be less motivated to work hard.

• It may increase corruption money sent overseas and this money will never come in circulation within India.

Will it reduce corruption?

3. Terrorism

Pros

• It will reduce the counterfeit money which is the main source of funding for cross border terrorism.

• Counterfeit currency in circulation and large cash stacks by terrorist now has no value.


Cons

• New currency notes can also be counterfeited.

• Naxals groups may not get affected as major source of their funding is local.

Will it curtail terrorist activity?

4. Timing

Pros

• The sudden introduction of denomination did not give unscrupulous people enough time to convert their black money in other form of assets.

• This is a prequel to make roll out of GST more effective.


Cons

• Between Diwali and January is the peak sales period for most retailers. Inadequate availability of new currency has negatively hurt the retail sales and the unsold stocks with wholesalers will lead to lower industry production for many months to come.

• This also coincides with the marriage season and has created chaos in making marriage arrangements.

• 50 days is enough time for many people to launder their black money and to covert it in non-currency assets.

Was the timing correct?

5. Denomination of Rs. 2000

Pros

• New Rs 2000 note has more security features and it is harder to counterfeit.


Cons

• Holding black money in Rs. 2000 will take less space compared to Rs. 500 & Rs. 1000, thus it will be easier to hold large sums of black money.

• It is difficult to get change for Rs. 2000 while making small purchase.

Effect of Rs. 2000 note on future black money?

6. Popularity of PM Modi

Pros

• Many people believe that this decision was very tough and it has proven the strong character of PM Modi. 

• This has been one the most bold steps to curb black money.


Cons

• According to critics, he has been unable to deliver on inflation and to bringing back black money from overseas.

• Some believe that PM Modi took this decision to increase his popularity and to fetch votes in future elections.

Affected on popularity of PM Modi?

7. Economy

Pros

>• The inflation will be lowered.

• Cash activity in real estate sector will reduce & the money will be channelized to increase industrial production.

• It will give a big boost to implementation of GST.

• Reduced corruption will result in more foreign investment.


Cons

• Lack of cash liquidity has substantially reduced retail sales and high inventory with wholesalers may result in lower industrial output.

• Rupee in short term may take a hit against the US Dollar.

• Lower value and revaluation of real estate may affect the existing business bank limits. It may also increase NPA (Non-Performing Assets) of banks.

• Laborers, small farmers etc. are suffering due to lack of proper planning.

Long term effect on Economy?

8. Effect on commoners

• Price of real estate will reduce, however honest people who have invested in real estate with their hard earned money will also lose their wealth.

• Interest rates are likely to come down; it means lower income for retired people who depend on interest income from fixed bank deposits.

• Poor retail sales will reduce industrial production and poor laborers may lose their jobs.

Who will get negatively affected?

9. Circulation of new currency

Pros

• ATMs were calibrated to handle new notes relatively quickly.

• Banks worked on holidays and extra hours to facilitate public.

• Government allowed old denomination to be used for fuel, government hospitals and other essential utilities.


Cons

• Lesser number of ATMs resulted in long waiting ques.

• Unavailability of enough cash in banks and ATMs often led to chaos.

• Inconvenience to people in rural areas where people travelled long distance and sometimes only to find out that the bank ran out of cash.

Is the management of circulating new currency done correctly?

10. Right decision

It is one of the biggest economic experiment in the history of India.

While PM Modi did the demonetisation of older Rs. 500 & Rs 1000 notes with a good intention, what needs to accessed is whether the process & policy associated with it was done in the correct manner.

Was the demonetisation in its current form a correct decision?

12 Answers

We needed a leader who is thinking for a middle and poor class. He has guts and he is doing for the mass.

Right people support to Prime minister Decision. Always wrong people did not support. But ask anytime Question only.


Black money is in forein. Real state. & gold. Not in running curancy.  It is bi mistake by modi

Modi ji it take a huge courage to take a such a decision over a night......so I support u in this revolutionary change.......modiji by far the strongest n loyal PM of India after Independence

This is a very poorly executed decision. 

Jab government ki itni aukaat hi nahi hai k black money ko swiss se laa sake to unhone ye step liya. 

As far as the decision is concerned, I think its a correct and bold move taken by the PM. For the step to be effective the privacy was extremely important and hence difficulty faced by common people due to this sudden announcement is obvious & understood. But however i do feel it could have been handled in a better way like 2000 rs note should have been introduced in the market before making this announcement for better flow of money in market and avoid long queue in front of banks and this would have given time to reconfigure ATM's as well according to the size of new note.

Only time will tell how much difference this decision makes but atleast for now it looks a bold and positive decision...

This was a very bold decision by PM Modi. 

Wrong or right, but I wish it has the desired affect.

you
Yes, He has not think about their vote bank..like other politician...
A revolutionary move, no pain no gain

Very good step of our prime minister.now required changes in income tax system.

I don't believe this survey

Demonetization has already started showing on black money holders. They are in much tension. Yes this decision was taken suddenly so it has put people into hustle.

According to me Modiji has done ok job . It will not have much effect on black money holders.