The CEO of Namma Bangalore Foundation, Sridhar Pabbisetty, spoke to the Founder of Jan Ki Baat, Pradip Bhandari, in order to demystify certain complexities around the issue of demonetization. Mr Pabbisetty believed that good planning is key to the issue; a systematic roll-out of the demonetization policy is required or else the whole policy would backfire on the government. A much-welcomed move, Demonetization has two advantages, namely, the eradication of black money within the Indian financial system and the reconciliation of the hoarded currency with a legitimate one. Mr Pabbisetty explained what the process would entail: cleaning of a generation of black money means the staging of enough stringent curbing measures and not just cosmetic, surficial measures. In countries like the US, money isnt liquid- the value of dollars is calculated and used digitally- which means its better traceable and better monitored. India is in the habit of dealing in cash, as evidenced in the massive cash component the country has. A digital economy would bring down the incidences of corruption and financial fraudulent behaviour, in general. Real estate, the sector in which a large chunk of black money is stored, would bear the consequence of demonetization.
The PM of India, Narendra Modi, announced on the 8th of November, his governments decision to demonetize the higher-denomination currency. The old ?500 and ?1000 notes were banned throughout India from morning of 9th November, with the citizens being allowed to either deposit their old notes in banks or get them exchanged, until the new ?500 and ?2000 notes come out. Such a move intended to renew the economic market place and rid the country of the black money it had accumulated till date.
As Mr Pabbisetty stated, the envisioned benefits of demonetization are larger than its disadvantageous effect, and it only requires a one-time adjustment cost. Jan Ki Baat stands with the government in its fight against corruption.