Question

advantages and disadvantages of demonitisation

Answer 1

ADVANTAGE:
*Demonitaisation will completely destroy all the black money in our country.
*Increase the job opportunities in future.
*Increase the transactions in digital system.

DISADVANTAGES:

*Business are encountering with the loss due to limited cash circulation.
*Unfavourable impact on GDP growth
*High scarcity of money change.

Answer 2

Advantages:
1) A major advantage is that demonetisation helped the government track the black money.
2)Black money was being used for illegal activities.But after demonetisation it will take years to generate a large amount of money and do those illegal activities like terrorism.This act ended those circles of illegal activities.
3)Another benefit is that due to people disclosing their income by depositing money in their bank accounts government gets a good amount of tax revenue.

Disadvantages:
1)The biggest disadvantage is that people were rushing to get rid of demonetised notes while inadequate supply of new notes affected day to day budgets of citizens. People would have to wait in Long queues.
2)another problem was that due to destruction of old currency units & printing of new currency units costed much which has to be borne by government and if the costs are higher than benefits then there is no use of demonetisation.
3)Another problem was that this move was targeted towards black money but many people who had not kept cash as their black money or rotated or used the money in other asset cases like real estate, gold, and so on were not affected by demonetisation.

As one can see demonetisation has both advantages and disadvantages. Demonetisation alone cannot fight the parallel economy and eliminate the black money. Several other measures are required by the government to change the economy for the good.