Good morning one and all. Respected Principal, teachers and my dear friends, it is my pleasure and privilege to stand before you today. I am honored to have this opportunity to speak to such a distinguished audience.Today on this occasion, I would like to talk about an event in Indian history that changed the course of the economy overnight, demonetisation.
Demonetisation is the process of withdrawing and declaring the current legal currency as invalid and replacing those currency notes with newer ones. The Government of India made one such historic decision in November 2016 when they declared the cancellation of Rs 500 and Rs 1000 currency notes. This decision was made to discourage and disrupt the circulation of counterfeit currency, black money and corruption.
The bold move demanded a shift from traditional means of exchanging money to a more digital one and thus stop corruption. Like any other change, this too came with its own set of critiques and challenges. Although a reforming move, the sudden announcement of the cancellation led to a state of complete chaos and confusion across the country.
As people rushed to exchange their notes, large crowds gathered outside banks and ATMs, with ques taking hours to complete. The decision also significantly impacted many small businesses that shut down as a result of an inability to adapt to the change.
On the plus side, because people were compelled to abandon cash-based transactions, demonetisation did result in a large rise in digital transactions. Increased accountability and openness in financial transactions followed, which was one of the policy’s main goals.
Additionally, there were some advantages in terms of reducing corruption and black money. Numerous people were found to be having huge amounts of undeclared money, and the government was able to find and prosecute numerous tax evaders. Demonetization was undoubtedly a crucial turning point in India’s economic history, however it is yet unclear if its long-term advantages will outweigh its short term negatives.