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March 09, 2017

Gr8 Topic of the Day - Positive and Negative effects of Demonetization

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Dear aspirants, we are very happy to introduce a new initiative of Gr8AmbitionZ, "Gr8 Topic of the Day". This will help you to brush up your knowledge on current affairs and will help you to improve your English writing skills.

Daily, we will post a current topic, with the basic details of it. You just need to pick a side and express your views in the comments section below.

For example if we say the topic "Chinese Goods vs Indian Goods", you just need to pick either Chinese Goods or Indian Goods and say your version supporting your version.

Do some research before sharing your thoughts. Just note down a few points which you feel important. Use your own examples or quotes to support your argument. Write a small synopsis with 5-10 lines using these points and post it.  If there are  grammatical errors, admins or other members will correct you.

If someone want to oppose with the points mentioned by you or want to correct you, they will respond to your comment. If you want to say anything against it, you can reply to them, or simply agree with the version posted by that person.

Rules :
  • If you find some grammatical error, point it politely. Don't make fun of it.
  • Respect the other candidates. Please don't use abusive language. 
  • None of you are allowed to share or ask any personal details here.
  • Don’t write stuff like “You are getting repetitive”, “Your English is not good” or “Will you do fraandship with me ?” etc.  We are here to learn, please don't forget it.  
  • Please keep in mind that we are doing this to improve our knowledge and English writing skills. Nobody is perfect. So, don't hesitate to write whatever you feel is correct.
Hope we made everything clear. Now let's have a look at today's topic. 

Today's topic is "Positive and Negative effects of Demonetization". Here are a few points to support or oppose demonitization.

To make everything clear, here we are sharing a few advantages and disadvantages of demonetization shared by common people in Quora. Read these points and pick a side. Write a small synopsis supporting your version.

Advantages :
  • It will help the government to fight Black money, corruption, terrorism and counterfeit currency with one single decision.
  • Arms smuggling, espionage and terrorist related activities will be choked due to lack of funding.
  • Counterfeit currencies are being used for financing terrorism which is being run by the enemy in India. Now Govt has taken a bold move which enables them to fight counterfeit currency/terrorist funding activities.
  • The new limits on ATM withdrawals will make the people use the cashless transactions. Card transactions will slowly replace the cash transactions in daily activities.
  • It will be easy for the Government to track the money being exchanged as exchange can only be done by producing a valid government identity cards like PAN, Aadhaar and Election Card from 10 to 24 November with a daily limit of Rs 4000. There is no limit on the amount as long as it is legal.
  • FIU of India get info about transactions from banks. During this period, banks will take extra precaution. Banks will share info with Income Tax dept. as deemed fit. So now it is difficult to get rid of the black money which is mostly in 500 and 1000 notes.
  • The traditional benami transactions have already received a big blow as the new legislation has a provision for seven-year imprisonment and fine, replacing the three-year jail term, or fine, or both.
  • This decision will help institutionalize the real estate sector bringing more transparency in the Indian real estate industry. This step would give the Indian real estate sector more credibility making it more attractive to the foreign as well as domestic investors.
  • Housing prices could witness downward pressure, helping revive demand in the sluggish housing segment (this will give much needed bloodline to the sector)
  • It will help the common man by putting an end to the artificial increase in Real Estate, Higher Education and Healthcare transactions bringing them within the reach of the common man.
Disadvantages :
  • Inconvenience to common people who will start running to the nearby bank to exchange the 500 and 1000 currency notes.
  • Cost of replacing the 500 and 1000 Rs notes. If all this additional money (a spectacular Rs.6.666 trillion) had to be printed using Rs.100 notes, it would cost RBI about Rs.11,900 crore, which is more than a four-fold increase. This is without taking into consideration the increased costs of operating ATMs (since they would need to be refilled more often), and of handling money in general. Scrapping Rs500, Rs1000 notes a costly idea
  • Very difficult for more than half the population who are not well versed with the card transactions.
  • This move deeply impacts the working sections of society: drivers, maids, cooks, electricians, plumbers. Anybody who provides services in the informal sector and depends on monthly or bi-monthly cash payments.
  • How do you expect a chai wallah to leave his business and stand in a queue to deposit these notes in bank?
  • What will happen to the common man who finds out that the note he is having is a fake one? How is the Govt going to handle such situations?
  • The small businesses will be affected at least in the shorter run.
  • Jan Dhan scheme, UPI/digital payment stack and payment banks are still in the nascent stage. It will be a long time before rural India moves to completely cashless transactions. In the short-term, people in rural India who have a significant amount of Rs 500 and Rs 1000 notes, but no official form of identification will have a tough time in exchanging their notes.
  • The big fish will be left out whose black money is in the form of foreign currency, gold and stashed away in tax havens.
  • Most of the black money would have already been converted into non monetary assets (land, real estate, gold, foreign currency, foreign bank accounts, etc).
  • Counterfeiting the notes again is not impossible.
  • The demonetization does not affect the black money in foreign accounts.
  • The demonetization does not affect the black money presently held in stock markets and bank accounts.
  • Again, the money stacked in form of cash with the thieves who would also be fools, only a miniscule part of their stained possession could be attained as not all the money is going to in 500′s and 1000′s denomination.
  • The illicit wealth will only be destroyed, neither would it be retrieved or confiscated, nor their owners be punished.
  • Politicians and businessmen holding black money in huge amounts have easy way around to avoid losing their money. They are using touts. An amount of say Rs.200,000 can be credited in 10 accounts with Rs.20,000 each. No one will be questioning a Rs.20,000 credit in account of a man with an average paying job. Now, think of this for bigger sums of money. It's already working.

Now please share your views. Please keep in mind that you can get your information from any source. But should present it in your own words. All the Best :)

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1 comment:

  1. I need some points solely based on demonetisation effects on the economy.against the motion..does people standing in long queues really affect the economy??

    ReplyDelete