Why I disagree with Demonetisation!

I guess by now most people in India would have learnt and been aware of the term 'de-monetization'.

For those who are not, allow me to explain in simple terms. De-monetization means banning a currency or banning a specific denomination of currency. So when Germany gave up its currency to use Euro then it was de-monetization and when in India the higher denomination currency of Rs 500 and Rs 1000 was demonitized then it was banned from 9th of November 2016.

Most people are very upbeat about it. I will not go not their reasons but you can read here, here,

some believe it was too soon like here and some think that it was wrong like here, etc. (the rest you can search on google if you want to read about it).

The reason I think it was wrong was because it wasn't thought through. I think demonetization was stage 6 or 7 among the financial reforms, more like the last step to integrate the country and we jumped to it at number 3.

1. Jan dhan yojna and opening of account
2. Payment banks
3. Declaration of black money
4. GST implementation (1 year)
5. Change in tax law so that digital transaction is taxed lower and cash is taxed higher. (implement it for 6 months to 1 year)
6. Bankruptcy laws are made stronger and real estate laws are also implemented
7. Ban higher currency like Rs 1000 and Rs 500. (The reason shouldn't be to bring in new notes, etc. but it should be to digitize the currency.) Around the same time all airports/banks/currency-exchange shops should have a prepaid card for tourists. 

While intention (black economy) behind this may have been correct. It is my belief that this measure is merely a temporary shock, which will mostly affect the 'not so smart' government officials; small level businessmen; and the village/small town people who don't have banks and facility of electronic transaction. History shows despite such measure being taken in the past -- Quartz, The Quint and Mint -- as we still had the problem in 2016. And besides the government has already announced that it will bring in new notes of Rs 500 and Rs 2000, hence it would be a matter of time when people will bring this stack to the parallel economy.

The reason I believe, that demonetization should have been done after digitalisation had reached beyond the top 20 cities is because then it would be clear that large transaction is something that should be done in electronic form. Then a crack-down would have been less costly and more effective. Mint has done a wonderful story on  the cost of demonetization. 

And I am interested to know what are other citizen's story. 

My maid has a problem she doesn't have any cash and we are also tight on the cash aspect so my flatmate has instructed the maid to let us know what all she requires at home and we will get it from bigbazaar or a bigger shop that uses debit card facility.

Heard from a friend: Someone was about to get married on Sunday, and hence was going to pay all his vendor in cash, but now is sitting on 500/1000 notes and he will have to go to the bank once it opens to change all currency and also explain why he has so much of cash.