Demonetization of Rs.500 & Rs.1000 note currencies by PM Sh Narendra Modi

For Demonetization

Against Demonetization

1. All counterfeit notes will cease to exist, since these can't be exchanged at banks. 2. With cash deposits over Rs.2.5 lakhs being scrutinized by IT department, disparity in income to tax will attract legal action. 3. Since higher denomination notes are banned, this will lead to lesser black money hoarding since hoarders will have to use larger number of notes, and will therefore attract attention of legal agencies. 4. Terrorist and anti-national elements will see funding sources cut out, with existing higher denominations deemed unfit as legal tender. 5. An effort towards a cashless economy, a precursor to digital payment adoption. 6. Cash-for-votes, unaccounted election expenditures can be capped down since the existing tenders (Rs.500 & Rs.1000) have proved to be unacceptable legally. Especially in note of UP elections.

1. Cash accounts for only 6-7% of black money accumulation, rest is in the form of other assets. Therefore, the effect in curbing black money will be minimal. 2. With a new Rs.2000 denomination being introduced, the chances of black money being circulated are even easier, since the new denomination is twice the value of removed Rs.1000 denomination. 3. Only the urban Indians have means for digital/card payments. Rural India will suffer. 4. For exchanging old notes, bank accounts are mandatory. Majority of rural India, despite JAM efforts, still doesn't have bank accounts.  5. Execution of idea has been poor - several businesses, marriages, hospitalized individuals, etc have suffered because new currency couldn't be replenished at a faster rate.