India

Demonetisation adversely affected the Indian Economy

Demonetisation adversely affected the Indian Economy
Written by Pallavi Parmar

Demonetisation adversely affected the Indian Economy which announced by the government to crack down corruption from the country. Almost six months after demonetisation India’s growth rate and Gross Domestic Product fallen to 6.1% in the January-March period which is lowest in more than two years. in the January-March period which is lowest in more than two years.

Last year in December when the Prime Minister announced demonetisation or to demonetised old Rs 500 and Rs 1000 currency notes, opposition predicted that the country’s economy would be severely hit. And many opposition parties and ministers also opposed this act and expressed their concerns over job loss and slow down in the informal sector, but still the government agencies and the finance minister Arun Jaitley maintained that impact of demonetisation would be short-term and marginal.

The former Prime Minister Dr Manmohan Singh has also criticised the demonetisation move and called it a ‘monumental mismanagement’ might bring GDP down by 2 per cent. He said “In my opinion that the way the scheme has been implemented will hurt agricultural growth in our country, will hurt the small industry, will hurt all those people who are in the informal sector of the economy. And my own feeling is that the national income, that is the GDP, can decline by about 2 percent as a result of what has been done. This is an underestimate,”.

Whereas PM Narendra Modi claimed that this Act would curtail the shadow economy and eradicate the use of illicit and counterfeit cash which fund illegal activity and terrorism. Although Demonetisation helps to eradicate the corruption from India and illegal fund transferring. As the main aim of this act was to eradicate counterfeit currency, fight tax evasion as according to the reports only 1% of the population pays taxes, eliminate black money from money laundering and terrorist-financing activities, and to promote a cashless economy. But it also came up with a major shock of fall down in India’s GDP from 7.6% to 6.1%.

About the author

Pallavi Parmar

Journalism is my profession, Blogging and Writing are my passion, Travelling is my love, Food is my life and Feminist by nature.