The Prime Minister of India announced the demonetization of Rs 500 and Rs 1000 banknotes on 8 November 2016. Sri Narendra Modi explained that he wanted to give a big blow to the black money hoarders and to eliminate the counterfeit notes from the Indian Economy. But, it turned out to be the creator of another black economy. Still now, the people of India have been suffering due to the shortage of cash. It is highly doubtful whether the demonetization has achieved the intended objectives.
It is my first-hand experience with the Indian Economy that Modi miserable failed in achieving his declared aims. The bankers of India have become millionaires within a few days thanks to the demonetization. The hoarders of black money struck the deals with the bankers for the exchange of black money offering them 30% to 40% share in them. The bankers will always be thankful to Modi and it is no wonder they hang the photos of Modi along with their Gods in their newly built houses.
The process of the Demonetization has been implemented without any serious deliberations and shock absorbents. India is a country of 50% illiteracy though the government claims 75% literacy. In addition to it, digital education is a mere 25% in India. In that situation, how can people adapt to a new cashless economy? Didn't Modi know this? I think he knew that the people would suffer due to the demonetization but he had to take the decision because he wanted to tell the public that he was doing something on black money.
Is Modi really successful in finishing off the black money? No, the demonetization has become a big failure on his part and the innocent are suffering a lot due to its consequences. The result of the process actually facilitated more hoarding as the 2000 notes are more easy to hide. A suitcase which used to carry Rs 1 crore before demonetization is now carrying Rs 2 crore. A secret drawer of the bathroom which had the capacity of Rs 5 crore now hiding Rs 10 crore black money. Do you still think the demonetization helped to curb the black economy?
( Note: The only good it did to me is that it helped me become an expert in Equity Investment and showed another way to earn creatively )