Impact of demonetisation on indian economy ??????????????????
Answers
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DEMONETISATION :
Firstly demonetisation refers to “de-monetising” the currency i.e, scrapping of currency notes of different denominations or in other words stopping circulation of currency notes.
WHY IS DEMONETISATION IMPLEMENTED IN VARIOUS COUNTRIES ?
To curb flow of fake currencyTo decrease the funding of terrorists activities
To control corruption
To tackle black money
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Demonetisation is not a new thing and it has been previously implemented and tested by various democracies of the world.
On 8 November 2016, the Indian Government decided to demonetise 500 & 1000 rupee notes. This decision came as a huge shock to majority of the people. As expected, there was an atmosphere filled with many unanswered questions and people were in a state of panic and this is a common thing because, according to human nature we require some time to get adjusted to various new things.
Citizens were given 6 months of time to exchange the demonetised currency notes with the remonetised currency notes.Sights of long queues near banks , ATM’s were a common sight. Limitations were laid on exchange of notes and this move made it difficult for many people who for many years have evaded paying taxes and collected money from unauthorised sources.
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Its been 10 months since the master stroke decision taken by our Indian Government and now lets take a look at various impacts and outcomes of demonetisation on Indian Economy :
As they say a coin has 2 sides , similarly every decision taken has its own advantages and disadvantages.
Advantages:
Internet Banking which was earlier an unexplored area of banking suddenly gained momentum and people started to tackle currency notes crisis by switching over to internet banking and many e-commerce brands like Paytm benefited the most.Government was successful in curbing the flow of fake currency and also to some extent in controlling many cross border terrorists activities.
Demonetisation was almost like a surgirical strike by the govt on various informal activities which were carried out by the people.
Many long term advantages like boosting e-commerce which will attract investors from all over the world which will directly lead to increase in the GDP of our country but this will take some time to show the results.
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Disadvantages :
Experts had already tipped that due to demonetisation growth in GDP would slow down.Many unskilled labourers have lost their job and the govt has failed in generating employment opportunities .
Due to this a dip was seen in the GDP of the fiscal year 2016-17.Many economists believe that govt needs to generate employment opportunities for the unemployed youth in order to boost the GDP.
Govt has partially failed in bringing back the normalcy in financial sector.
Hon.Finance Minister Mr Arun Jaitley stated that demonetisation coupled with introduction of GST will reap in many long term benefits to the Indian Economy.
10 months have passed and almost 70% of the 1.3 billion Indians have entrusted their faith in our Indian Govt and its efforts in developing the financial fold of our country and they believe that this move will certainly abridge the gap between the haves and the have nots .
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Hope this helped you......................
Most of the businessman paid their income tax which increases Indian economy
This helped to halt the circulation of fake currency.
Due to this individual deposited their money in Jan dhan account This amount helped India for betterment of GDP.