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Demonetization in India

India adopted major monetary changes for the last 24months. Here’s a look at the impact.

Strengths

Invalidates counterfeit bank notes thereby restricting funding of terrorism
Nullifies unaccounted money being hoarded in cash
11 trillion rupees of previously unaccounted cash have entered the banking system - bringing down interest rates and inflation.
Brings many people into the tax net, increases taxation and may reduce the budget deficit

Weaknesses

Normal commercial activity severely restricted in the short term due to unavailibilty of cash
The short notice given and the unplanned rollout has severely affected the common public in need of cash for their daily requirements.
The informal sector, the largest sector in India which has no access to bank accounts and deals entirely in cash has been the most impacted.

Opportunities

Big step towards India's move to a cashless and a digital economy.

Threats

Botched roll out has given the oppositition enough fodder to attack the government and mobilize public support against it.
Conclusion
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