The current buzz in India is that the country is bifurcated into two halves with Modi supporters on one side and the others opposing his note ban decision. The main question is that who actually is going to benefit with each currency note burnt.
Currency Note Burnt
There is a lot of talks circulating in the country which are trying to subvert Modi’s move to fight corruption. Some of the opposition are placing an argument that what if the black money stacked with the people, fail to reach central bank or any other bank. But, precisely what if the money hoarders decide to destroy their stacked currency instead of following government norms of declaring or exchanging the notes.
Will Modi’s effort go futile?
Will demonitization of currency won’t help the country?
Will there be any change in the overall GDP?
The answer is Yes.Because this move is a complete masterstroke with all the assumption and facts which are already cosidered and contemplated. So literally its a check and mate move that the government and RBI nexus has come upon with Demonitisation will only corner the black money hoarders but also give a boast to the economy.
There is a very interesting quote that is trending all over the social media, i.e;
”With each money burnt Modi is getting richer.”
To be precise it means with each money failing to reach the bank and contradicting to what everyone is assuming, our country’s treasury is boasting not depleting.
Logically, if you recollect the golden words written on every currency note of the country is:
“I promise to pay the bearer a sum of rupees XXX”.
It is categorically self explanatory that every note of any denomiation whether black or white is liability of Central Bank. This is because, the Central Bank has taken the oath with RBI Governor signing in the declaration. So with every note that is destroyed or failed to reach the bank, the liability of the central bank automaticaly goes down.Going in to the basic thumb rule of economics it states “The aggregate difference between assets and liability is equity, which is the net residual ownership of owners in a business.” And, a business is considered to be succesful when there is a high proportion of assets over liabilities. When currency shrinks assets are larger than liability, giving RBI a room to fork out more dividends and print more notes.
Irrsepective of the fact that how the hoarders react, it’s the Government who will be the ultimate gainer. It is eventually the Economy that will boost up. That means the normal masses will be benefitted.