Black money before and after demonetization: A big failure by government

demonetization affect

November 8, 2016 is the date every Indian remembers because it is an unforgettable day. That day has shaken the entire country with demonetization. The Modi Government has cancelled all the 500 and 1000 rupee notes in the country. Many people suffered a lot due to demonetization effect, people stood in lines at banks and ATM’s for many days. Few old people who are unable to stand in queues have passed away while standing in lines.

People can exchange their old notes in the banks and there was a withdrawal limit of Rs 2000/- per day. A new Rs 2000 note was released by RBI. Many businesses went into losses during the demonetization as people were short of money. The main mission of the demonetization is to eradicate the black money in the country. Some people welcomed this decision of demonetization by PM Modi but some people opposed as there is no proper planning in this operation.

But this demonetization is a big failure for the government as they didn’t eradicated black money and infact they helped black money holders to convert their black money into white money. When 500 and 1000 notes were cancelled, common people stood in lines for many days in hot sun. But not even a single business man or a politician is seen standing in lines to exchange their notes. A business man and politicians are the main culprits to store black money.

All the businessman’s and politicians are no fools and they have converted their black money into white money in a great intelligent way. The black money holders used various sources to convert their black money into white. They have used the farmers Jhan Dhan bank accounts and deposited money by giving certain commission. Many people rushed to gold merchants and purchased gold in large amounts. The black money holders also used many other sources to convert their black money.

This is a big failure because before demonetization Modi said there is a total of Rs14 lakh crores of black money in the country. Modi stated that at least 10 lakh crores of black money will be wasted which is a great use for the government. But finally the black money holders have successfully deposited Rs 13.7 lakh crores which makes only Rs 30,000 crores wasted. This is a big blow for the government as they didn’t eradicated black money but they indirectly helped the black money holders.

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