When Prime Minister Narendra Modi announced the government’s decision to demonetise Rs 500 and Rs 1000 notes on 8 November, he said that such a move would arrest corruption and attack the parallel economy in the country.
But the Economic Survey 2017 which was presented in the Parliament on Tuesday, one day before the Budget Session starts, it became quite obvious that demonetisation had little or no impact on tackling corruption.
Did Demonetisation Affect Black Money?
The Economic Survey does not mention any immediate impact but predicts that corruption ‘could decline, if incentives compliance improve’.
This only gives a vague report of what the long-term impact could be under certain conditions, if and when placed into effect.
Real Estate Prices
It was anticipated that real estate prices would see a sharp decline as investing unaccounted money gets difficult, but the report, yet again, doesn’t confirm a decline in the future but leaves us with an assumption.
Effects on Jobs and GDP
The only surety that the Economic Survey reports is that a lot of jobs were lost on account of this currency ban. It also led to a shortage of cash which is likely to be fixed by March 2017, after the economy is remonetisation. Given that the economy wasn’t back on track, 50 days into demonetisation as Modi had promised, one cannot be confident on the Economic Survey’s dates.
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