Demonetizing Rs 500 and 1,000 notes will lead to decrease in purchases, profits, investment, income

By Hemantkumar Shah*
The decision to demonetize Rs 500 and Rs 1,000 notes from currency is a macho decision by the government which will have no positive impact on Indian economy.
(1) In 1978, a similar decision was taken by the Morarji Desai government. But the black money volume increased. It did not reduce. A same result will be there this time, too.
(2) In 1978, hardly 10% of people were using these notes. At present, almost all people use these notes. So they will be harassed for exchange.
(3) Poor people will be exploited, as they mostly don't have bank accounts. Private people will get undue benefits from exchanges.
(4) Recently more than Rs 60,000 crore black money was unearthed under the income tax (IT) scheme. No positive impact has been seen in the short run. Nothing will happen in the long run.
(5) As a result of this decision, perhaps another Rs. 50,000 crore will be destroyed by people. It will hardly have any positive impact on income, employment, prices and investment.
(6) It may trigger depression in the economy, already reeling under the same, as unaccounted money is used for buying goods and services. This will stop and my lead to decreased purchases, profits, investment, employment and income in general, and on the short run it may lead to depression.
(7) After 1978, black money increased. It values at present more than Rs 30 lakh crore. It will not be reduced or deleted. Even if it is reduced, it will be of negligible degree.
(8) It will trigger more corruption, which is one of the most effective sources of black money. Those who give cash to banks will be asked for explanations, which will increase corruption. It seems it is election funding programme for the rulers.
It is a bogus, directionless and totally political decision.
---
*Economist, based in Ahmedabad

Manufacturing, services: India's low-skill, middle-skill labour remains underemployed

By Francis Kuriakose* The Indian economy was in a state of deceleration well before Covid-19 made its impact in early 2020. This can be inferred from the declining trends of four important macroeconomic variables that indicate the health of the economy in the last quarter of 2019.

Incarceration of Prof Saibaba 'revives' the question: What is crime, who is criminal?

By Kunal Pant* In 2016, a Supreme Court Judge asked the state of Maharashtra, “Do you want to extract a pound of flesh?” The statement was directed against the state for contesting the bail plea of Delhi University Professor GN Saibaba. Saibaba was arrested in 2014, a justification for which was to prevent him from committing what the police called “anti-national activities.”

The soundtrack of resistance: How 'Sada Sada Ya Nabi' is fueling the Iran war

By Syed Ali Mujtaba* The Persian track “ Sada Sada Ya Nabi ye ” by Hossein Sotoodeh has taken the world by storm. This viral media has cut across linguistic barriers to achieve cult status, reaching over 10 million views. The electrifying music and passionate rendition by the Iranian singer have resonated across the globe, particularly as the high-intensity military conflict involving Iran entered its second month in March 2026.

Search This Blog