After the high-value currency was banned India still facing problems, negative impacts of demonetization. Image Source: Pixabay.com
One fine evening 2 years ago on November 8th, 2016, India was shocked to hear the news of demonetization announced by PM Narendra Modi. The high-value cash was banned from the midnight of the announced date to cease the negative impact of corruption. As a result, the economy received a severe blow and is still recovering. Also, the common men faced the heat of the decision.
The opposition is not leaving any stones unturned to prove the decision wrong, adding to their political score. The opposition, Congress party is about to organize a nationwide protest on Friday to mark the second anniversary of the decision that has not only sabotaged the employment and economic growth but also caused a chaos to the diversified genres of businesses as per the Opposition.
Manmohan Singh, the former Prime Minister also stated that the government must not forget the misadventures have the potential to spoil the economy. He also stated that the small and medium-scale businesses, which form the base for the Indian economy, have not yet recovered completely from the negative impacts of demonetization. Along with the businesses, the employment opportunities have also received a blow, setting back the employment segment which is already unstable.
According to a set of data received from the Centre for Monitoring Indian Economy, a research firm, 1.5 million people had lost their jobs immediately after the devastating news was announced two years back. Also, the introduction of a new form of tax on consumption deeply affected the small and medium scaled industries. With time, growth has ricocheted from the effects of the cash ban by reaching around 8% in the quarter of June. This has made India the fastest growing economy. However, the negative impacts of demonetization continue to reside in the society as the market is incapable to generate jobs in the expected rate. Every year, more than 12 million young people enter the labor market, which is risking the social unrest and gradually reducing the chances of re-election of PM Modi.
The duo decisions have blown the businesses severely and resulted in a growth of 6.6% in the last financial year.
In fact, PM must put his endeavor to generate jobs at an exponential rate as promised in a campaign. He committed creating 10 million employment opportunities every year. On the contrary, the reality is far from touching the numbers committed even though he is about to complete his term.
Urjit Patel, the Governor had also backed the policy by keeping tight-lipped. The officials from the government have always supported the decision taken by the PM Modi. Arun Jaitley, the Finance Minister has posted on Facebook that the motto of the government is to formalize the economy and it has now become difficult to break through the tax system and evade tax.
Also, the Minister for Commerce and Industry, Suresh Prabhu has stated that demonetization is one of the most crucial and bold decisions taken by the government to eradicate the existence of corruption and establish transparency in every transaction.