Demonetization is a step in the right direction

Against the motion

I would like to start by saying that demonetization has really brought wonderful
changes in the Indian Economy. I am sorry but those puzzled looks are making me a
bit nervous. Did I say something wrong? Oh indeed. Well I am vehemently opposing
the motion. However I cannot help but agree to the fact that demonetization has taught
the India people sharing and caring. Sharing of black money off-course and caring for
those who practices corruption.
A very good morning ladies and gentlemen. Today I stand before you to express
my views on how demonetization is not a step in the right direction. As we all know
that agenda of the Government behind the demonetization was 2 fold:
1. The one is to eliminate counterfeit currency so as to curb terror financing;
2. The second one is to eliminate the unaccounted wealth stored in cash or in
simple term to shrink the size of parallel economy i.e. black money.

Does this demonetization really succeed in achieving these purposes? Does not it
impacted the rural, middle class people the most? The action was meant to flush out
illegal money, but it created massive cash shortages and millions of poor people with
few savings were hard hit. Now the bigger question: is this step right for Indias
economic growth and jobs creation? My answer unfortunately is not a Yes.

Several countries like Zimbabwe, Myanmar, Fiji, Singapore and Philippines among
other countries too have demonetized currency. And all failed - their economy
collapsed, food shortage, people died due to protest. Soviet Union split due to
demonetization as of the reason.

We must not forget that Indias GDP rise in last two decades has been largely
because of middle class led consumption and next twenty years are also pivoted
around the GDP growth expectations driven by the consumption. The consumption
pool is impacted because the circulating money was taken out from the system
resulting into reduced spending power. This will cause serious damage to the
consumption by the unorganized labour force and rural population who are at the
bottom of the pyramid.
 Corruption is the hot topic and it is boasted that demonetization will wipeout all
corruption like corruption by cronyism, Political corruption, Bureaucratic corruption
and corruption in daily life. I dont think that it will make a big dent in the corruption
issue because the root cause is not the availability of cash. Black money is stored in
the form of real estate, gold and jewelry.

The benefits towards reduced terrorism fake currency are also at best short lived
and not worth the collateral damage.

Instead, we should have fixed the corruption in the tax department, cracked down
on tax evaders and offshore undeclared money gone after public sector banks dubious
lending to big corporates, continue to digitize government process and schemes.

Government should have also resolved to ensure that

All political party to declare their fund input details.

All benami assets be scrutinized by IT deptt.

Lokpal is in place

Govt. Bank run e-wallet is given wide publicity in rural India

Free Internet in entire rural India with good connectivity.

This demonetization now looks political motivated and I think it was. Forcefully
government has to change demonetization' into 'Cash less Economy to show people
that we are succeeded. It has not been able to demobilize the black cash and much less
the black income generation process. So the black economy, estimated to be 20
percent of Indias gross domestic product or $450 billion, because only a fraction of
that is held in cash, is not getting affected by this move.

I would like to end by saying that the demonetization was not the step in right
direction which is like getting your arm amputated for a severe infection in your
finger. The trick is to treat the finger without losing the arm.