Hats Off to Mr. Modi! This was a very bold decision as a lot of political will and determination are required and it could be taken by none other than him.
The motives behind the action are quite obvious:
a. This will help curb corruption in the country
b. Terrorism will be controlled
c. Black money which is lying dormant will be out in the market to an extent, thus leading to better liquidity
d. Fake currency will become obsolete
e. Parallel Black Money Economy will be shattered
The impact of the decision:
a. Real Estate prices which weren't so real over the last few years, will be realistic and become affordable to the Great Indian Middle Class.
b. SMEs will be benefited, subject to the fact that they become geared up to the use of technology
c. Hotel rooms tariffs will reduce
d. Lifestyle goods will become more reachable and affordable for people in general
e. Gold will loose its investment charm, and people would instead of investing in gold, will use the surplus disposable amounts to buy other things
f. A general feeling of security will prevail in the masses
g. E-Commerce, E-Wallets will flourish
h. The rural population and daily-wage earners in urban India will be impacted negatively for around 2-3 months, after that things will be back to normal
There have been remarks and reactions by many people that this should have been done in a phased manner. However, if you see last 2 years economic reforms actions by the Government, this statement become null and void, as the Government has:
a. Launched Jan Dhan Yojna to enable rural, daily-wage earners open zero balance bank accounts
b. Voluntary Declaration Scheme was valid till September 30, 2016
c. All Gold transactions above a certain limit attract PAN of the buyer
Thus, we can safely conclude that the decision has very positive long term impact on the Indian economy.
Request to people:
a. Don't panic and rush to Banks to get the new currency notes, let senior citizens and others who have dire need of hard cash to transact first
b. While exchanging the old notes with new ones, please clearly mention the quantities of 500 and 100 notes and the date on your ID proof, let them not be misused
c. You still have sufficient time till December 30, 2016
Thanks,
Amit U Jain
+91-98270-34860