Home » Subject » Essay » Advantages and Disadvantages of Demonetization policy


In the realm of India, the more things change the more they remain the same. But demonetization has been a leading attempt to knock off corruption and the use of black income. It has also paved the way to the end of terrorism funding, fake currencies and hefty donations; thereby transforming our nation to a cashless one. However, this is just one part of the clean-up. More bold and imaginative approaches are to be made in order to polish the structure; some of which are listed below.

Action against bribery

As per Dr APJ Abdul Kalam's ideology, it is only the youth who can change the scenario of demoralization in India. He had asked around 540 million youths to start a movement against bribery. It is only them who can urge their parents to depart from this action of fraudulency and build our nation a corruption free one. It would be wonderful to live in a world where the exploiting bureaucrats are arrested and the police force stops classifying cases based on the money seized. This calls for the formulation of stringent laws of action against such cases.

Complete Digitalization

Digitalization is the first step to recording all documents and ensuring that every transaction made is transparent. This would enable businesses to be formal, legal and registered. Moreover, tax calculations will become 100% accurate. By complete digitization, RBI would know the net worth of any citizen and this would enable faster loan processes.

Electoral funding

According to the expressions in the famous book "Funding Democracy", tackling political corruption must involve amending old campaign finance laws and forging an alternate source of electoral funding that is paid for by the taxpayer. The author of the book points out that electoral reforms typically arise following corruption scandals, mounting campaign costs and a lack of equal access to participate in the political process. No doubt, India is a prey to all the three. He proposes to collect ₹1,000 from each of India's 40 million odd taxpayers and launching a ring-fenced electoral fund. At their discretion, citizens could allocate an additional maximum of ₹5,000 to a favored candidate. Under this system, the fund will slowly swell. Candidates can either opt for this public financing or forego it altogether, with their choice signaling who they may be more beholden to. By this, taxpayers will deny funding to politicians who fail to deliver. It will be in every party's self-interest to support a pro-growth agenda, championing taxable employment that will increase their own campaign funding.

Bill of receipt mandatory for sale

We all are well aware that bill books record all sales transactions and are produced to the auditor for examination to deduce the amount of payable tax. Systems that do not follow such forms of accounting escape from paying their part to the government. Street vendors benefit most out of this and pose a challenge to the organized sectors. Hence, steps should be taken to acknowledge such issues by making bill of receipt mandatory.

Education and awareness

It is only the educated people who are well aware of the socio-economic scenario of the country and believe in overall development rather that restricting to selfish means. They not only become better citizens but also realize the importance of voting, taxation and digitalization. More number of skill development and training institutions should be encouraged. Hence education must be given prime importance and the Indian educational system should ensure that knowledge is spread everywhere by every means.

Over the last few years, the overall growth of India has been fast paced and statistics prove that it is expected to increase further in the near future. It only requires the cooperation and understanding by each and every citizen in realizing their duties.

- Neha P Asrani

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