Demonetization

Financial experts have been talking about the demonetisation of the Rs5,000 note. One thinks that the country should learn lessons from India’s botched attempt at demonetisation. Usually, even before the government announces the demonetisation of the local currency, tax evaders already convert their savings in rupees to dollars, other foreign currencies or gold. The only group which suffers is the members of the business community. Also, once the Rs5,000 note is discontinued, banking and commercial transactions will take longer as people will take time to count currency notes. The cost of the printing of currency notes will go up as the authorities will have to print more notes. The dollar currency is likely to be in demand, which is going to affect the already fragile currency exchange rate. Also, there may be a severe shortage of currency notes as happened in India and people will form long queues in front of banks. Is our bureaucracy more efficient than India’s and will it be able to manage the demonetisation process in a better way? The country is already in the middle of a pandemic. People shouldn’t be inconvenienced any further.

Pir Shabbir Ahmad

Islamabad