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Answer 1

Answer:

First of all, demonetization significantly reduces corruption from taking place. It certainly puts a full stop to corrupt practices. Demonetization significantly hampers individuals dealing in black money from carrying out their evil ideas. Most noteworthy, corrupt people in the future will feel scared of hoarding cash.

Demonetization improves the banking system significantly. Demonetization would certainly infuse more sophistication in the banking system. The economy of a nation will move into a cashless direction due to demonetization. Moving in the cashless direction would mean better access to credit and revamping of financial operations.

Another notable advantage of demonetization is reduced liability for the government. This is because demonetization reduces the risk and liability of liquid currency. Furthermore, handling soft money is far easier than handling hard money. Also, every note is a liability for the government. Hence, demonetization reduces this liability by removing certain notes from circulation. Therefore, the old currency becomes useless for those who don’t disclose their income.

Demonetization will lead to fewer instances of tax avoidance. This certainly is a massive advantage of demonetization. Money that is deposited will be taken track of by income tax authorities. Therefore, people will hesitate to use tax avoidance tactics. Furthermore, the loan transaction will also be under scrutiny. Consequently, there would be an increase in the flow of taxes. This would certainly result in government undertaking more public welfare measures.

Explanation: