The International Monetary Fund has hailed India as a bright spot amidst a slowing global economy. Indian economy has the potential to achieve double-digit growth rate. In spite of being a bright spot on the world map, a host of problems confront India which caste shadow on its governance credentials. These so-called black spots include: (a) black money, (b) corruption, (c) money laundering, (d) counterfeit currency, (e) tax evasion and (f) terrorist financing.
The new Government at the Centre, which took charge in May 2014, under the dynamic leadership of Prime Minister Shri Narendra Modi has a vision to make India a modern and vibrant economy. Policies and programmes to rejuvenate the economy have already been announced in this regard.
It was in the above context that the Government of India decided to withdraw the legal tender character of ` 500 and ` 1,000 banknotes of the Mahatma Gandhi Series from the midnight of November 8, 2016. The announcement was made by no less a person than the Prime Minister himself in an unscheduled live televised address to the nation on the evening of November 8, 2016. The demonetized bank notes accounted for 86 percent of the countryâ€™s cash supply.
The use of digital technologyâ€”worldâ€™s fastest growing economic activityâ€”to improve governance cannot be over-emphasized. Digital technology has become the greatest agent of change and promises to play this role even more dramatically in future. One major objective of the demonetization exercise is to encourage cashless/electronic transactions in the economy. The Government of India has taken policy decision to encourage electronic transactions and has, in this regard, announced a number of incentives.
Technology, competition, and benchmarking to the best international practices have to be the driving force of Indiaâ€™s development efforts. Demonetization exercise needs to be seen in this perspective.