Public Administration Mains 2018 : Model Question and Answer - 59

Public Administration Mains 2018 : Model Question and Answer

(Public Administration Paper II / Chapter: Significant Issues in Indian Administration)

(Current Based) Question: Do you think Demonetization was helpful in recovering the black money in India ? Give your arguments. (10 Marks/150 Words)   

Model Answer : 

It is now safe to conclude that on a cost-benefit analysis, the RBI has only losses due to the demonetization when all RS. 500 and RS.1000 notes returned to the banking system. The flawed implementation of the programme only worsened the situation.

(1) There was no significant black money in cash in India contrary to what a section of top economists had said.
(2) Black money holders used demonetisation as a big opportunity to whiten their ill-gotten wealth directly to bank counters either directly or through benamis or in other ways .

The originally stated goals of demonetisation were mainly three—(a) a major clampdown on the black money in the system, (b) cash-based corruption and (c) terror funding. There are ample evidence to understand that demonetisation hasn’t impacted corruption and terror.

Demonetisation-resulted cash crunch hit the common man hard, businesses suffered and the economic growth was hit by a significant margin. (Total Words- 152)

Valuable inputs from The Indian Express Business News titled ‘Demonetisation: RBI says 99% banned notes are back; where is the black money ?’ by Dinesh Unnikrishnan

(Linkages: Demonetisation and Recovery of Black Money, Demonetisation and Flawed Implementation, Demonetisation and Eradication of Cash Based Corruption)

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