7 months ago
Demonetization was one of the great step taken by PM Modi in Nov 2016.
Why Demonetization was required?
India is a very big country with 1.4 Billion Population. Demonetization was done for below reason:
Very few people were connected to banking system as a lot of people keep money in home and don't deposit them into Banks.
Since people keep all money as cash into home, it becomes black money and government have no track of these black money. This black is being used for illegals things and also it increases inflation.
Since a lot of people are not connected to banking system, it's very difficult to transfer money to these for all welfare schemes. This creates a lot of corruption as money was taken by middlemen.
Low GDP Growth:
Since people keep all money as cash into home, it's not added into GDP System of India which is a very drawback for Economy.
Since people keep all money as cash into home and they use cash as medium of trades, it's mostly used in crime and terrorism and government agencies can't track all these money.
Before Demonetization, it was very difficult for citizens to buy a new SIM Card for Mobile as they have to give a lot of documents and it took 1 week for new Mobile Number activation.
Benefits of Demonetization:
Black Money Eradication:
Demonetization forced each people to open a bank account and also connect their Aadhaar Card with PAN Card. Now people are keeping money into bank account instead of cash which is helping government to track the money in Indian Economy.
Since now every citizen have bank account and it's linked with their Aadhaar Card and PAN Card, now government can directly transfer money for Social Welfare Schemes into their account. This have completed removed the corruption done by middlemen.
Since now every citizen have bank account and it's linked with their Aadhaar Card and PAN Card, if any person takes more cash or deposit more cash it can be easily tracked by government agencies and now terrorists can't use much cash for their bad intentions and it's also easy to track who is giving money.
Mobile Connection Comfort:
Since now every citizen have bank account and it's linked with their Aadhaar Card and PAN Card, new SIM Card is issued immediately and it's activation is done within 30 minutes because every citizen database is already with government.
Comfort for Citizens:
Now every small or big vendor takes money by UPI and this have removed Cash system completely. This is saving a lot of Money for RBI to print a lot of Currency.
Now even a small Golgappa seller takes even 10/- INR directly by UPI PayTM or BharatPe or GooglePay.
Technical Innovations for Demonetization:
Since now every citizen have bank account and it's linked with their Unique Aadhaar Card and PAN Card, it was very easy to build a system where money can be transferred between citizens directly by using Mobile Number as it's linked with their Unique Aadhaar Card.
A lot of companies emerged because of Demonetization and it created revolution in Indian Startup Market.
Jobs created by Demonetization:
This created 10-20 Lakhs IT Software Jobs in India because a lot UPI Companies were started after Demonetization.
This is creating a huge revenue for government every year now.
Business Analyst at TCS Singapore
7 months ago