Demonetization An Attempt to Decode!

Why Govt Resorted to Demonetize ?

Two Possibilities or purposes

1.To Recapitalize Banks and Increase Black Money (if this is the objective of the Government then country's interests are not protected instead compromised in the name of black money!
2.To Curb Black Money (Hope this be the purpose) Don't know how ! Bcz they are again issuing Rs.2000 Notes

How it Impacts people and Economy

People end up paying Taxes having less money to spend and thereby GDP goes down bcz businesses will have less sales and profits at least for two years which is why capital outflows have already started from india.

Already you might be seeing disheartened street vendors companies are going to be next.

What is the Benefit to the Government and RBI and How will they recapitalize?

When most of the liabilities are surrendered i.e Black money deposited or promissory note (Cash scrapped without depositing) expired RBI Prints and gives it to Govt . Govt will Give it to Banks , Banks will give it to whomsoever they want to give

If the money is deposited at least the govt will get taxes which will form part of the capital expenditure on Infra.

RBI Will cut Interest rates to boost liquidity and banks lend loans to businesses out of the funds received from the government (Businesses might be 50/50 real or the ones like sitting in the NPAs same as prevalent now) 50% contribute to GDP others you all know Its a new beginning through higher denomination!

The real measures to curb Black Money should start from Collecting Loans Due to Banks from the businessmen alias politicians not by demonetizing and collecting from normal Businesses !

Bcz the Major Problems 'Lies therein NPAs' more than evasion of taxes!

Just an attempt to put up the views ... I may be ignorant of anything which needs consideration!