Demonetization Myths Debunked

DEMONETIZATION DEBUNKED.

WHAT THE MEDIA DID NOT TELL YOU.

HOW WILL IT IMPACT INDIAN ECONOMY?

@RAJESHSOUND

A BILLION INDIANS WHO WERE GETTING READY TO GO TO BED, THAT NIGHT, WERE

STARTLED, BY SHOCK AND AWE.

A NIGHT OF JUBILIATION FOR MANY, DESPAIR FOR SOME.

ON THE NIGHT OF NOVEMBER 9, 2016, 8PM IST, INDIAN PRIME MINISTER SHRI.

NARENDRA MODI DECLARED THAT ALL ₹500 AND ₹1000 NOTES WOULD NO MORE BE

LEGAL TENDER AT THE STROKE OF MIDNIGHT.

DEMONETIZATION WOULD SOLVE COUNTERFEIT, CORRUPTION AND BLACK

MONEY IN ONE SALVO.

TWITTERATI CALLED IT “A BOLD MOVE”, “A #SURGICALSTRIKE ON #BLACKMONEY”.

THIS SLIDESHARE IS NOT ABOUT THE INTENT, TEMPORARY HARDSHIPS OR POLITICAL WILL.

THIS SLIDESHARE DISCUSSES IMPACT TO INDIAN ECONOMY

SHORT TERM RELIEF ON COUNTERFIET

+ WILL WEED OUT THE COUNTERFEIT

CURRENCY IMMEDIATELY

+ DO NOT KNOW IF NON-COUNTERFIETABLE

A COMMA ON CORRUPTION

+ THERE MAY BE A PAUSE BECAUSE THE

OLD MONEY CANNOT BE USED.

+WITHOUT OTHER SYSTEMIC CHANGES,

CORRUPT WILL FIND NEWER WAYS

SMALL PART OF BLACK MONEY

MOST STATIC BLACK MONEY IS IN FORM OF

GOLD, REAL ESTATE, FOREIGN ACCOUNTS

WHAT ABOUT GDP, INFLATION, RECESSION.

LACK OF CLARITY ON MAGNITUDE, DEMOGRAPHICS AND ITS CIRCULATION ADDS TO THE UNCERTAINTY OF RETRIEVING BLACK

MONEY.

ACTIVE BLACK MONEY, IS THE MONEY IN CIRCULATION. IT HELPS IN ECONOMIC

ACTIVITY, PARTLY.

STATIC BLACK MONEY IS THE CASH LOCKED UP AS CASH IN THE LIKES TRUNKS,

MATTRESSES AND LOCKERS. THE STATIC MONEY SERVE NO SIGNIFICANT PURPOSE TO

BOOST THE ECONOMY EXCEPT FOR THE POLITICAL PARTIES AND IS USUALLY USED TO

FIGHT ELECTIONS.

IMPACT ON GDP

MORE ‘STATIC’ BLACK MONEY INTO FORMAL ECONOMY

THERE IS MORE LIQUIDITY INFRASTRUCTURE PROJECTS HIGHER

PRODUCTIVITY MORE JOBS AND BETTER EMPLOYMENT BETTER GDP GROWTH.

PENALTIES AND TAXES BOOST TREASURY BETTER FISCAL CONSOLIDATION

BETTER CURRENCY STABILIZATION GDP GROWTH.

INFLATION

MORE ‘STATIC’ BLACK MONEY INTO FORMAL ECONOMY MORE LIQUIDITY HIGHER

INFLATION.

HIGHER PENALTIES AND TAXES SMALL TRADERS PAY MORE TAXES HIGHER SELLING PRICE HIGHER INFLATION.

RECESSION

LESS ‘ACTIVE’ BLACK MONEY REDUCED FLOAT FOR SMALL TRADERS REDUCED

ECONOMIC ACTIVITY RECESSION.

PENALTIES AND TAXES ON SMALL TRADERS MORE LOSS SMALL TRADERS OUT OF

BUSINESS RECESSION

THE INTERPLAY BETWEEN THE THREE IN THE NEXT FEW MONTHS

WILL US SHAPE THE FUTURE. ONLY TIME WILL TELL.

DEMONETIZATION DEBUNKED.

WHAT THE MEDIA DID NOT TELL YOU.

HOW WILL IT IMPACT INDIAN ECONOMY?

@RAJESHSOUND