Question

discuss the usefulness of demonetization as an instrument to check underground economy

Answer 1

Demonetization, though it failed initially, it can open a window for next stage of bringing the money stashed in foreign n banks. if some incentive is given for bringing that money in India and using in development projects, the economy may grow and employment generated. Government may never know the details and owners of these accounts because banks also do not know the real owners. The accounts are opened through varios channels based in different countries. Only incentive schemes to bring that money and permitted to be used in India in Projects and to be kept in banks at some nominal interest can help in development work. A suitable amnesty scheme would be required for this.