Demonitisation: Complete Review After 3 Years

credits: NDLF

After 2 long year counting of all the old 500 and 1000 rupee notes on 29 August 2018 RBI said that 93.3% demonetised currency came back to the banks, but previous some of the experts were thinking that more then 30% of the money in the country is black money even the SBI on December 2016 said that approx 2.5 lakh crore rupees in the country will never come back and are black money because whoever will be caught hence they will either burn it or will flow it into the water and this was also said by the honourable Prime Minister. But at the end, nothing like this happened and there can be only 2 reasons for this either there was not as much black money as the government was thinking or the people got some new techniques to convert their black money into white, and according to our research the chances of the second option are more because of the loopholes in Demonetisation

How the motives of the government got failed-

1) Black Money- 15.44 lack crore rupees was the value of the demonetised currency and 15.31 lakh crore rupees came back to the banks so are the remaining 16,000 crores black money? approx 3,300 crore rupees are still lying in the neighbouring countries like Bhutan and Nepal and an also a big portion remained with the NRIs those were not able to return it also a big amount of money stayed in the donation box of the temples. Ultimately only 0.1% of the money was black

2) Fake currency- government considered demonetisation as a surgical strike on the fake currency which ultimately got failed as of June 2017 more than 11 crore rupees fake currency was found in the market

3) Cashless economy- Yes this is true that there was a rise in no of the cashless transaction during the ban about slowly- slowly when the ban was lifted there was a decline in cashless payments which you can see in the graph too-credit: live mint

4) tax collection- The government said that there will a phenomenal increase in the no on taxpayers and tax collection. yes this is true as there was an increase of 14% in the tax collection as compared to the previous year as shown below, but we can't call this as a success of demonetisation because if you will see the whole graph you will see that even during the year 2013-14 there was an increase of 14% so this increase in number is really normal

credit: the wire

Loss due to Demonetisation

1) Money Loss- In the first 50 days there was a loss of 1.28 lakh crore to the economy (CMI) also the cost of printing new notes were 21,000 crore

2) Unemployment- In the first 5 months there was a loss of 15 lakh jobs

3) GDP- GDP fell from 2% which was already predicted by some big economists like Mr Manmohan Singh,

4) Deaths- more than 150 people died because of this

But still, the government is playing the blame game as the put all the blame of GDP fall on the finance minister Mr Raghuram Rajan's policies. By calculating all the money the loss can be considered approx 5-6 lakh crore rupees and this is equal to a big scam do let me know in the comment section that what do you think about this.