Tuesday, 5 September 2017

Demonetization-Boon or Bane

Well it's always good to discuss and it was really nice discussing with you all however I don't wanna mention name here also m not a government spokesperson nor m i a opinion maker just wanna express my point of view and m not going to prove anyone wrong here but just after RBI released on demonstration(gained 16000 cr and printing new currency cost 21000cr so loss is 5000cr) people have made this calculation so easy which is not true and people blindly went on to criticise this move _to those would like to say that Demonetization is not a failure in fact it's a success however the extent of success is not as expected yet it is important to consider a few things here and those are:-
1. 1.4% itself results to approximately 16000 crores which is not a small amount.
2. 98.6% of money which came back can not be considered to be white money as long as IT department is not satisfied with the explanation given to the IT department pertaining to the notices sent to them regarding excess cash deposit during the Demonetization drive.
3. Under 1st Income Disclosure Scheme which ended 30th september 2016 at least ₹65,250 crore of undisclosed assets were declared in the one-time compliance window, yielding ₹29,362 crore in taxes to the government.
4. 2nd Income declaration scheme which started in December 2016 and ended on March 31st 2016 witnessed a declaration of approximately ₹20000 Crores out of which ₹10000 Crores were collected as tax and ₹5000 Crores were deposited in zero interest Pradhanmantri Garib Kalyan Deposit scheme for a period of 4 years.
5. Apart from the above benefits one of the benefit that went unnoticed is that a lot of money that was out of the mainstream banking channel came back to the banking channels which has resulted in low interest rate on different loans.
6. The money in the informal sector which was difficult to track by IT department and ED has come back to the mainstream and is under the scanner, lot of shell companies and Tax Evaders are being questioned and will certainly yield positive results.
7. Digitisation of the Economy has seen a positive growth and it can play a pivotal role in reducing the Corruption and curbing the Black Money as cash transactions have gone down by 8%
8. Tax Base has seen a growth of approximately 24%.
So, according to me it would be wrong to say that the Demonetization drive has failed, although I agree there have been prons and cons as well but I will not see it cynically and will wait and watch a little more to give a decisive verdict. I believe we should give some more time to the government to justify the claim...