Modi’s cash ban could be considered as one of the biggest change in indian history , there are some good things about this change, It will insure fake currency dealers will have to bear a great loss and many will be bankrupt which is good for indian enconomy, since the new notes will be more secured it will not be easy for them to fake it any soon. Secondly those people who has stacked cash ( black money ) will have to bear a big loss.

What i didn’t find good about it ?

There are restrictions on depositing cash which is good but 200% fine is just not fine , Money is energy no matter who has it , government must try to get back all those cash , so government could lower the tax a bit so that more black money holders can deposit the cash , anyway government is going to make a lot of money by this , but if government forces them to pay 200% tax many will prefer to bun those money rather than depositing it , which could be a great loss to nation , This will be like money in swiss bank which can never come back to india.

How about small vendors ?

We all know small vendors deal in cash , It’s not about one day or two days , it will take months to get everything normal , You might have noticed the queue in ATM, People are getting frustrated to stand in the queue just to withd Rs 2000, This will force them to go cashless, They will prefer to purchase goods from a super market where they can swap cards , This will have a huge impact on small vendors, they will slowly lose their sell completely and they will be forced to be either jobless or search another job, This move will benefit big players like reliance but what about small vendors?

 

Effects On Economy

As you can see sensex has come down to 25000+ point where it was more than 29,000 points , similary dollar price has reached Rs. 68.56 where it was just above Rs. 65 , There is no doubt this decision will have huge effect on economy. Money is energy no matter who has it, As far as stock market is concerned , This could be a short term effect, However no one can guarantee which way it will go . As this market has already lost thousands of crores.

Home Work

This decision seems to be made in hurry! sighting the upcomming UP election.
1)  A country with approx 1.5 billion population , where there are many villages which have no easy access to ATM and bank are going to suffer a lot by this.
2)  if you have noticed the Rs. 2000 note; it is completely different in size , making it difficult for the bank to upload Rs2000 note, A complete transformation in software & mechanism might require to make it available any soon. t
3) Rs 2000 note may not be of much use as it cannot be exchanged easily. Only supermarket might accept it, small vendors might not. Since you can swap cards in supermarket , hence this Rs. 2000 note will have less utilization.
4) Rupees might lose it’s value, Many tourists and SAARC country people work in india, They do not have UID or voter ID to show to the bank , They are facing difficulty. This will hurt tourism ; and secondly people will prefer to deal in gold or carry USD than indian currency.
5) This decision is corporate friendly more card purchase means more big players like reliance , MORE.. and other supermarket will make big profit But small vendors will be washed out of competition.

Conclustion

I have a mixed reaction , i would like to wait and see, what tomorrow will bring us, I don’t see much home work done on this , so it could turn into anything later. So i would prefer to watch how people will deal the situation for few months.