Demonetization is the process of withdrawing the legal status of currency. In order to replace the old currency notes, and in some cases to counter the counterfeit currency. 8th Nov, 2016 is the day when the country witnessed 86% of the paper currency being stripped off its legal tender status.
In India, this campaign was launched to counter the black money or dark economy, estimated to be worth 476 billion USD. The scope of the campaign is broader. It targets not just black money, but various other evils also, such as Hawala money (which sources its origin from the unaccounted money), and counterfeit currency. Terrorism, Naxalism, drug mafia, and certain other notorious elements (read separatists in Kashmir funding the stone pelting) have also been indirectly hit.
Demonetization Effect On Various Sectors
The campaign has impacted various sectors. Ranging from agriculture to real estate, every sector has witnessed a momentary slow down. The short-term effects have outraged the common man. But change demands determination. The way from cash to cashless, deserves a little enthusiasm. For a transparent and robust economy, digital transaction is the need of the hour.
Demonetization Future Impacts
Digital payments, instant transaction, and hassle-free banking are some of the future effects of the campaign. Agriculture will definitely receive an upshoot. Earlier the sector was out of the purview of digitalization, and the scope was limited to KCC, DBTL only. Secure transactions, effective tracking, less tax evasion & transparency in elections are some of the positive impacts.
Various digital methods such as USSD, AEPS, Digital Wallets are being promoted. A boom in the digital payment platform, PayTm was observed after demonetization. Hinting at the switching of the payment methods, from cash to digital. Digitalization of the economy is required to promote transparency in the system and prevent any misuse of the currency. Moreover, digital methods are far more convenient and secure than the conventional methods.