How could we forget the date i.e., 8th November, 2016 that was a historic day for India. It was just a week after Diwali, festival of lights celebrating victory of good over evil, when Hon'ble Prime Minister Mr. Narendra Modi announced that Rs.500 and Rs.1000 Indian currency notes would not be a legal denomination from the mid night which constituted around 86% of the total currency in circulation. This abrupt move is rare where execution was properly managed.
Where Income Tax Department came up with the Disclosure Scheme for the black money holders who had escaped payment of tax illegally and also a move towards digital India for payment by mode of UPI and electronic wallets.
People hued and cried on standing in line with demonetized currency. While people don't have any problem standing the long queue for movie tickets, they are okay with Movies but not for economy. Political Parties criticized and tried to take advantage of such bold step taken by BJP Government.
Abruption caused by tragic move was temporary where there was a dramatic drop in India's GDP growth rate to around 6.1% from 7-8%.
When we look at the difference in the economic status that has taken place during the period it was surprisingly positive.
- Value of USD: On the historic day v/s Today i.e., +3%;
- Market Capitalization with Stock Exchange has increased by 1/3rd;
- Sensex and Nifty has seen a new high during the period.
As per the NPCI, RBI data Number and Value of transactions is surprisingly increasing from Rs. 1413 bn (869mn txns) in Jun-Aug'16 to Rs. 2524 bn (1937 mn txns) in Jun-Aug'17 i.e., around 79% in value and 123% in volume. Where UPI has seen much faster adoption then IMPS and Mobile Wallets, also usage of Credit Cards has seen a high rise in value as well as volume.
Latest report issued by world Bank reports that India jumped 30 places above to Rank 100 in terms of Ease of Doing business.
While Norway is at its 97%; India is still struggling at 3% on digital payment let alone Cashless Economy as a whole is a far-fetched idea. While we as excited citizens have done a lot of jump yard and thought Demonetization was a good move to cashless economy we should also do a lot of substantiate research on rural economy to understand how wallet services has taken place in rural India and how practical to call this as a 'success'.
It is the responsibility of each and every Indian to help the government not to fail, so that, together, we as a country can move forward.
The author is a practicing Chartered Accountant who has keen interest in Income Tax, GST and a Fraud Examiner. He has vast experience of dealing with clients including PSUs, PSBs and various other small and medium industries.
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