advantages and disadvantages of demonetisation
Answers
Unearthed of cash which is not in circulation and locked within few hands.Common man also can afford to buy the immovable assets.Curb of black money and fake notes.Protection from the illegal activitiesIncrease the transparency in earnings which may favorable impact on the revenue of govt. in terms of taxes.Increase the subscribers under the upcoming tax regime (GST).Reduction of Interest rates may be the favourable move in startups and making India.Increase the job opportunities in future.Ease of recovery of long term dues in public sector and banking Sector from public.India is developing as best investment destination with the view of ease of doing business, reliability and strong govt. administration system.Increase the transactions in digital system.
Disadvantages:
Business are encountering with the loss due to limited cash circulation.Black money holders are searching the alternative ways for come out of the situation.Overwhelming move in notes. However implementation is not in par with the expectation.Unfavourable impact on GDP growthHigh scarcity of money change.
Answer:
Advantages of Demonetisation
A major advantage of demonetisation is that it helped the government track black money. Large sums of black money was kept hidden by tax evaders. Demonetisation helped government uncover huge amount of unaccounted cash. According to estimates made by RBI, people have deposited more than rupees 3 lakh crores worth of black money in the bank accounts. This has helped the government in slowing down the plague of parallel economy.
Disadvantages of Demonetisation
The biggest disadvantage of demonetisation has been the chaos and frenzy it created among common people initially. Everyone was rushing to get rid of demonetised notes while inadequate supply of new notes affected the day to day budgets of citizens. Banks and ATMs witnessed long queues while small businesses suffered temporary financial losses. The situation was even worse in rural India where people struggled to exchange and withdraw cash due to lack of enough number of banks and ATMs in their vicinity.