Demonetization – Long-Term Gains

We discussed about the effects of DEMONETIZATION on our economy in the previous posts. In this post we will try our best to analyze this “step” with the positive perspective and put those points on the table.

Any step taken by the Government is analyzed by the top bureaucrats of our nation. We can just imagine how much calculation is done by the top politicians and the top officials of the government for any step which is taken for the betterment of the nation. In spite of the short term effects on the economy, we should also take a look on the long term gains, as rightly it is said “Short term pain for long term gain”.

Also Read : Demonetization effect on elections


Terror organisations are likely to get a big blow due to the DEMONETIZATION of old currency. As these terror organisations have a stock of old fake currency and this stock can neither be exchanged from banks nor they can use them in the market as the currency is invalid. Reports released by JKP shows that these terror organisations use fake currency of high denominations. Various agencies have also reported about the desperation of terror organisations for unavailability of cash for various operations like arms occupation. Fake Indian Currency Notes (FICN) network is being disabled, thus affecting the funding of terror funding in Jammu And Kashmir, North Eastern areas and Naxalite hit areas.



Black money or unaccounted money inside the country will be of no use. This unaccounted money residing inside the country in cash will just be a piece of paper. And if anybody tries to use this unaccounted money, the income tax department is having a sharp eye on these transactions. The only option available for black money holders is to deposit this money and pay tax which is 200% of TAX AMOUNT or let the value of this money to reduce to zero. Estimated 4.6 lakh crore rupees will be uncovered through this process. This black money is present with most of the corrupted officials, businessman and politicians.


Almost every political party is going to suffer from this process as polls are ahead and any type of unaccounted money collected by the political party in cash stands null and void. Result is fair elections in upcoming polls. There are 5 upcoming polls in 2017 in states like Uttar Pradesh and Punjab. Political parties are going to have a hard hit.



Demonetization will be a hard push for the Indian economy toward digital banking and digital payments. This is a chance created for indulging a large number of people into the banking system, especially those from rural areas. Demonetization will transform the cash-based economy into cash-less economy. The plastic money will soon take over paper money. Thus, rendering transactions more secure and easy to monitor.


With large number of people paying taxes on their deposits, a large amount of revenues are expected . Hyderabad has already witnessed over 100 crore of house taxes paid post demonetization announcement. After lagging behind China in the GDP chart in the last quarter of the year, India is expected to make a comeback in early 2017.

There are many blames on the Government for making a common man’s life miserable. In the past 10 days people have suffered a lot. But my heart goes out to the people of India who in spite of these challenges are standing in the queues and are backing the government. This proves the power of democracy. And again makes us proud of being a part of the WORLD’S LARGEST DEMOCRACY.


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