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Four years ago, Prime Minister Narendra Modi’s sudden announcement of demonetizing the Indian currency and replacing it with the new currency notes sent a shockwave across the country.
On 8 November 2016, with four hours' notice, PM Modi had announced the decision to ban Rs 500 and Rs 1,000 notes from midnight onwards, which sent people scurrying to the nearest ATMs to get their money out.
© YouTube
The Modi-led government announced the demonetisation of all Rs 500 and Rs 1,000 banknotes of the Mahatma Gandhi Series. It also announced the issuance of new Rs 500 and Rs 2,000 banknotes in exchange for the demonetised banknotes.
On its fourth anniversary on Sunday, PM Modi shared the data to suggest that the overnight scrapping of Rs 500 and Rs 1,000 notes brought in formalisation and transparency along with a widening of the tax base and curbing of counterfeit currency.
© Reuters
“Demonetisation has helped reduce black money, increase tax compliance and formalisation and given a boost to transparency. These outcomes have been greatly beneficial towards national progress,” PM Modi said in a tweet.
Demonetisation has helped reduce black money, increase tax compliance and formalization and given a boost to transparency.
These outcomes have been greatly beneficial towards national progress. #DeMolishingCorruption pic.twitter.com/A8alwQj45R
‘Operation Clean Money’, the Prime Minister said, increased formalisation.
“17.92 lakh persons identified for the online verification process in the first phase. 3.04 lakh persons who had deposited cash of 10 lakh or more, but had not filed return till the due date identified. 2.09 lakh such identified non-filers responded & paid self-assessment tax of 6,531 crore. Self-assessment tax of over 13,000 crore was paid by the targeted non-filers,” another Tweet of PM Modi stated.
© Reuters
However, many people on social media didn’t seem to agree with what PM Modi had to say. They stood divided over PM Modi’s tweet with many pointing out at what a failure this decision has been for the nation and most of them shared memes on the same.
Opposition leaders from Congress criticised the government over demonetisation, alleging that the Modi government has continuously changed the explanatory reasons.
© Reuters
Demonetisation was aimed at helping a few of the Prime Minister’s “crony capitalist friends” and had “destroyed” the Indian economy, Congress leader Rahul Gandhi said.
Check out some of the reactions here:
Happy Demonetization Anniversary..
A special message at the end pic.twitter.com/RqgXnpV0x6
Demonetization was an unthoughtful and reckless piece of decision reminiscent of the 'Cowboy' character who shoots from his hip as in the American western movies of the 60's.
— Pradyut Bordoloi (@pradyutbordoloi) November 8, 2020Phir 15 lakh
23 ka petrol pic.twitter.com/y83SvKHnnH
#DeMonetisation pic.twitter.com/UN9RnHY3nB
— Ãzy (@AzyConTrolI) November 8, 2020Pure gold.. Ye bhaisaheb bhi 8th Nov ke sath amar ho gaye jab jab itihas mein 8th Nov ka varnan hoga inke ye shabd swarnim aksharon mein likhe milenge
— Tufail Khan |طفیل خان (@Tufail9Tufail) November 8, 2020Sahi bol rhe hain GuruG..
Demonetization killed Job's, Economic growth & Middle class consumers
Only beneficiaries are Ambani &Adani pic.twitter.com/JuPfGL4vHA
The only purpose of #Demonetization was to win 2017 UP elections by killing oppositions money power just 4 months before UP elections.
Even after 4 years of #Demonetization, not a single MLA MP Minister arrested with black money, kaala dhan.
4 saal lag gaye fayada batane ke liye?
What is sample size of study?
Sir ji do you honestly expect us to believe demonetisation has magically reduced corruption . That’s bullsh*t
— rahul (@rahulprakash91) November 8, 2020The data shared by the Prime Minister said notes in circulation increased to 22.35 lakh crore as on December 2, 2019, from 17.74 lakh crore as on November 2016, it said. “Before demonetisation, the average on-year growth rate of notes in circulation was at 14.51% from October 2014 to October 2016,” it said.
While a December 2018 NBER (National Bureau of Economic Research) paper authored by Harvard professor Gabriel Chodorow-Reich, Gita Gopinath (now IMF Chief Economist), Prachi Mishra and Abhinav Narayanan estimated a 2 percentage points contraction in the quarter of demonetisation (Oct-Dec 2016), it did point out there may be long-term advantages in tax collections, shift to savings in financial instruments and non-cash payment mechanisms.
© Reuters
Finance Minister Nirmala Sitharaman also cited increase in direct tax collections, income tax returns, and direct tax to GDP ratio as the outcomes from demonetisation. In her tweets, she said direct tax collections increased to Rs 10.5 lakh crore in 2019-20 from Rs 6.95 lakh crore in 2014-15, while direct tax-to -DP ratio increased to 5.98 per cent in 2018 from 5.86 per cent in 2017, and 5.53 per cent in 2016.
The number of counterfeit notes detected increased to 7.62 lakh in 2016-17 from 6.33 lakh in 2015-16 and 5.94 lakh in 2014-15. The number of counterfeit notes detected has, however, subsequently declined to 0.90 lakh (till September-end ‘20) from 2.97 lakh in 2019-20, 3.17 lakh in 2018-19 and 5.23 lakh in 2017-18, the data showed.
What are your thoughts on demonetisation? Tell us in the space below.
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