MISINFORMATION ON DEMONETISATION
While the government has pointed out that Rabi crop sowing has not slowed down and has only increased in the post demonetization period to highlight the fact that demonetization has no negative fundamental impact on growth and government has also pointed out that any slow down in other sectors are only temporary and not alarming, the media reports of note ban putting brake on the economy is persisting.
The latest news is that the two wheeler , passenger vehicle and commercial vehicle sale has slumped and declined due to the note ban.
The fact is that the demonetization only resulted in the withdrawal of high value currency notes. Transactions by cheque, bank transfers , credit/debit cards have continued without change.
The price of two wheelers , four wheelers are in the range of Rupees one lakh and above and there is no reason why such transactions should slow down because of demonetization. Obviously, this indicates that most of such transactions in the pre demonetization period have been taking place by cash (black money) and putting a brake on black money, hawala money and counterfeit notes have resulted in slow down in the sales of the automobiles.
This is precisely the objective of demonetization to reduce the role of black money in the economy and if the auto sales have really gone down after the demonetization shock, it only shows that the impact of black money in the economy has been considerably reduced and demonetization has a positive impact and is providing the expected results.
With the black money largely gone, the economy will be back on healthy growth path soon when the transparent deals would inevitably happen.
Thanks and regards
Nandini Voice For The Deprived