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Demonetization in India
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Demonetization in India
There are many reasons that can lead to demonetization of a banknote. But in most cases, it is not easy for such to happen and for this to take place there must be many issues to support the same. India is one of the countries that did change its banknotes. Several reasons accompany this achievement. This paper will analyze the 2016 Indian Banknote Demonetization through the notions of epistemology and methodology, based on the theories that are described in the books written by Niccolò Machiavelli and Karl Marx. Next, will then explain the possible motivations and ambitions behind this event, by each theorist. Finally, this paper will further illustrate the general responses, which Machiavelli and Marx will call for in consonance with their theories written in their books.
On November 8th, 2016, the Indian government, led by Narendra Modi, the Prime Minister of India, announced the demonetization of all previous Mahatma Gandhi series Rupees with the face values of 500 and 1000, through an unscheduled live televised address to the nation. The policy was activated since the midnight of the announcement date, and citizens who held the demonetized currencies had a time limit of 50 days to exchange for the new currencies. The plan to demonetize was kept highly confidential within a group less than ten people and had been furtively planned for over six months before the announcement day (Mali, 2016). The Cabinet of Indian Government was only informed followed by the Prime Minister’s announcement to the public. Posterior to the report, Urjit Patel, the Governor of the Reserve Bank of India explained this event as a counter-terrorism action due to the severe amount of forgery currencies that were existing in the Indian economic system. During his statement, he also claims that this event was designed in efforts to against corruptions and tax evasions in India.
Throughout the Prince and the Discourses, one of the most significant responsibilities for the ruler of the state Machiavelli emphasizes is that to establish and maintain the stability of the state. Considering the changes in time, in the case of this event, the Prince who is then indicated in the book can now be considered as paralleled to the main political figures within the Indian government, such as, the Prime Minister of India. Obviously, the current Indian political system is different from what is recommended in the Prince, but the essential political ideologies that he mentions in the book are universal in the field of politics. Instead of what Machiavelli has argued in the book, the most stable political system exists in the form of a mixed republic similar to the ancient Rome, the current politics in India take place within the framework of constitution. As a federal parliamentary democratic republic, India adopts the dual policy system with brunches of the state and the government, each ruled by the President and the Prime Minister of India.
The Indian situation is what is identified as political realism based on Machiavelli’s arguments. According to this author, there are many changes that can be done in a country especially that covers the country’s effectual truth of politics. These are some of the core drivers of a country that aims to maintaining stability and for a better governing of a state (Shirley, 2017). Machiavelli’s theories help in viewing the Indian situation in a better way. For this reason, many people can get the understanding as to why changing Indian’s currency was of the essence and its impact would be later felt by every person. It would solve many financial issues and many other cases that arise as a result of fake currency and also control the rate of corruption in the country.
Machiavelli further emphasizes the difficulties when maintaining the stability of a state as a constant struggle. Maintaining a state’s stability is something that requires an upper hand in the government. This will help a country to be able to secure its activities and strategize on how to maintain peoples’ confidence. Machiavelli indicates, the main struggle for the prince himself happens between Virtu and Fortuna, however, to maintain the stability in a Republic, the main struggle happens between civic Virtu and corruption. Thus, renewing a corrupted state becomes essential when constructing a stable state. Corruption is a significant issue affecting many countries, it comes in many ways, and it involves many people. There are instances where prominent government officials who are supposed to lead as an example are also included in corruption. Such are some of the reasons that may lead to economic, political and social instability of a State.
Based on a recent survey published by an anti-corruption organization called Transparency International, India is found to be the most corrupted countries in Asia. The results indicate that nearly seventy percent of their survey samples from India had the experience of bribery when accessed to public service. With India being affected by corruption, arises the issues on how this can be controlled. Corruption has infested India making it difficult for the ordinary citizens to run their activities smoothly. Corruption has led to a lot of losses in many Indian business premises. To demonetize the largest face values of Rupees, which will essentially create barriers for the transactions of the briberies, considering that for the individual currency exchange, which is based on their past tax reports, hence, diminishing the number of corruptions. Changing the currency is a major blow to corruption because it aids in reducing the dominating fake notes that are often used. It also lowers bribery as this will help reduce individual currency, thus lowering amount of money in peoples’ possession.
In the book, the Communist Manifesto written by Marx, who he offers two possible explanations to this demonetization act. In the book, one of the main focuses of Marx is the class struggle. As a big believer in history, Marx argues that the constant struggles between classes are the main reasons for most of the historical revolutions. In the book, Max writes that in many cases people in opposition because of their ideas o beliefs often feel like they are the ones write and does not consider the value of the opponents’ ideas. This makes them get involved in open fights. These open fights majorly end in the construction of the society because of the implementation of the new ideas, but at times it ruins what has already been made by introducing what is not fir or preferred by many. Hence, according to Marx, this demonetization act could be seen as a class resistance of the proletariats, represented and led by the Prime Minister of India.
According to Marx, about the Indian situation, even though the Indian Prime minister will differently not support demonetization this will mean that there are two outcomes that will be expected from such. It is either the currency will not be changed and because of the parties’ differences or the currency will be changed, and it will serve a greater good purpose to the country. Either way, there will either be a positive outcome form the same or a negative one that will affect the country’s stability (Geeta, 2016). During the announcement, Modi tried to support demonetization by saying that the country’s traitors and its black marketers who mostly were involved in the use of black money will not be at a position of moving large amounts of capital. This kind of people will not find the worth of 500 rupee notes and 1,000 rupee notes. For this reasons, most of the citizens who are working hard to earn honest money will feel privileged because their rights will be protected. According to Modi, this action happened as a counter-terrorism act with the essential purposes of protecting the earnest citizens by punishing the corrupted one trough the notion of demonetizing. It is notable that demonetization will most likely affect most of the illegal business that does not follow the right channels like money laundering.
There are plenty of reasons for people to believe in Modi’s speech. For example, immediately after the announcement, this event became controversial in India. Nearly 20% percent of the Indian GDP paralleled from the economy and operated with near impunity. This move has also triggered the fits of anger from Modi’s political party, who has evidentially proven to accept cash bribes. Regardless of the resistance from the discontented bourgeois, Modi responded with a firm attitude and ambition to check the corruptions in India. Furthermore, Modi’s background also indicates him as a proletariat. Modi spent his childhood in a both socially and educationally disadvantaged community in India called Modh-Ghanchi-Teli. As a child, Modi helped his father to sell tea in a train station. And, just like the majority of the Indian families, he certainly did not have much to inherit from his parents. Thus, Modi can be seen as a person who belongs to the working class, based on his poor living environment during his childhood. And, as an educated member of the proletariat community, people have reasons to believe and categorize Modi’s action as a class resistance.
The possible alternative explanation regarding the motivation behind this event is that this event is motivated by the common interests of the bourgeoisie. According to Marx, when it comes to resisting the dominance of the bourgeois, the working-class people should stick as a nation and operate in the concept of a union. Even though, Modi’s actions might be generated based on the poor, instead of the work-class people, the decision was still made by a small group of people who essentially have the highest social statuses in India. In the book, Marx writes “The ruling ideas of each age have ever been the ideas of its ruling class.[endnoteRef:1] Similarly, deciding without the consultation of the rest is indifferent from the past. Hence, an action claimed to be against the bourgeois, could, in fact, be an action of consolidating the self-interest for the bourgeois or the future bourgeois. Although, Marx has claimed that for those workers who are educated in politics by the very people, they will eventually use their education to overthrow as proletariat become more politicized. [1: ]
The contributions on the Indian demonetization can also be supported by the works of Pilato. Pilato was a prominent philosopher, and people respected his time. He made lots of contribution from his writings and some of the teachings he made. One of his most significant work was the Republic which her designed by Socrates who was once his teacher. Pilate identifies means through which a society can learn on the verge of discovering the real meaning of justice. In this case, India requires justice from the financial misuse, and that is to why demonetization comes fit regardless of what other officials think of its outcome (Singh, Sawhney, & Kahlon, 2017). Even though there are many controversial ideas on the same, it needs to be accomplished because it seems to hold more promising achievements.
Pilato compared his society to three souls, and he identified that the peasants were the society’s foundation. Like in this case, it is the Indian citizens who are affected by corruption, and that is to why demonetization will be of the essence in solving their financial problems like corruption. Corruption is making the citizens spend a lot of money more than they make and this contributes to the financial crisis because most of them cannot maintain simple lives. These are those who are not capable of maintaining their businesses because of an alarming rise in corruption rates which is depleting their hard earned income. Based on Pilato’s theory on the society, he identifies that everyone has a responsibility in the society and that is to why everyone should be treated with respect and their demands adhered to just like in the case of India. The issue affecting India is corruption and demonetarization seems like the perfect solution to solving this misery that is affecting the good citizens of the county.
According to Machiavelli, when renewing a corrupted state, power has to come from the outside the system with violent interruptions. Machiavelli’s argument is evident in India’s situation because it is clear that the Modi who is a prime minister announced monetization without informing many officials within the government (Ganesan & Gajendranayagam, 2017). This supports Machiavelli’s idea because this is the only way in which corruption could be stopped with a swift action that will find many participants unaware. Many government officials are always involved in corruption, and that is why there are those who were not agreeing with this method of changing the currencies. Even though monetarization was considered as a violent interruption in India, but the effects were positive, and it impacted many especially the citizens who were working hard to make substantial income free from corruption and other illegal activities like money laundering.
To sum up, Indian Banknote Demonetization is one of the achievements in the country’s history. There are many issues that arose as a result of the same, but the benefit of this strategy overcame any adverse outcome. Many theorists have explained various concepts in their theories that help in understanding the ideas of the Indian situation. For instance, Niccolo Machiavelli and Karl Marx are some of the theorists who have written books that give a good understanding of the issues at stake about Banknote Demonetization in India. Demonetization in India was stimulated may many factors including urge of ending corruption which had been a significant problem in this country.
Ganesan, G., & Gajendranayagam, B. (2017). Impact of demonetization on Indian Economy. IJAR, 3(9), 433-436.
Mali, V. (2016). Demonetization: A step towards modified India. International Journal of Commerce and Management Research, 2(12), 35-36.
Rani, Geeta. (2016) “Effects of Demonetization on Retail Outlets.” International Journal of Applied Resea rch 2.12): 400-401.
Shirley, M. A. J. (2017). Impact of Demonetization in India. International Journal of Trend in Research and Development, 20-23.
Singh, P., Sawhney, R. S., & Kahlon, K. S. (2017). Sentiment analysis of demonetization of 500 & 1000 rupee banknotes by Indian government. ICT Express.

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