Question

SA on benefits of Demontization

Answer 1

Demonetization of Currency - Merits

Demonetization of currency means discontinuity of the particular currency from circulation and replacing it with a new currency. In the current context it is the banning of the 500 and 1000 denomination currency notes as a legal tender.

The government’s stated objective behind the demonetization policy are as follows; first, it is an attempt to make India corruption free. Second it is done to curb black money, third to control escalating price rise, fourth to stop funds flow to illegal activity, fifth to make people accountable for every rupee they possess and pay income tax return. Finally, it is an attempt to make a cashless society and create a Digital India.

There is a background to the current decision of demonetization of 500 and 1000 rupee notes. The government has taken few steps in this direction much before its November 8, 2016 announcement.

As a first step the government had urged people to create bank accounts under Jan Dhan Yojana. They were asked to deposit all the money in their Jan Dhan accounts and do their future transaction through banking methods only.

The second step that the government initiated was a tax declaration of the income and had given October 30, 2016 deadline for this purpose. Through this method, the government was able to mop up a huge amount of undeclared income.

However, there were many who still hoarded the black money, and in order to tackle them; the government announced the demonetization of 500 and 1000 currency notes.

The demonetization policy is being seen as a financial reform in the country but this decision is fraught with its own merits and demerits.

Merits of Demonitisation

The demonetization policy will help India to become corruption-free. Those indulging in taking bribe will refrain from corrupt practices as it will be hard for them to keep their unaccounted cash.

This move will help the government to track the black money. Those individuals who have unaccounted cash are now required to show income and submit PAN for any valid financial transactions. The government can get income tax return for the income on which tax has not been paid.

The move will stop funding to the unlawful activities that are thriving due to unaccounted cash flow. Banning high-value currency will rein in criminal activities like terrorism etc.

The ban on high value currency will also curb the menace of money laundering. Now such activity can easily be tracked and income tax department can catch such people who are in the business of money laundering.

This move will stop the circulation of fake currency. Most of the fake currency put in circulation is of the high value notes and the banning of 500 and 1000 notes will eliminate the circulation of fake currency.

This move has generated interest among those people who had opened Jan Dhan accounts under the Prime Minister’s Jan Dhan Yojana. They can now deposit their cash under this scheme and this money can be used for the developmental activity of the country.

The demonetization policy will force people to pay income tax returns. Most of the people who have been hiding their income are now forced to come forward to declare their income and pay tax on the same.

Even though deposits up to Rs 2.5 lakh will not come under Income tax scrutiny, individuals are required to submit PAN for any deposit of above Rs 50,000 in cash. This will help the income tax department to track individuals with high denominations currency.

The ultimate objective is to make India a cashless society. All the monetary transaction has to be through the banking methods and individuals have to be accountable for each penny they possess. It is a giant step towards the dream of making a digital India. If these are the merits, there are demerits of this policy as well.

Answer 2

Hello yaar,

Demonetisation of money means the currency which is existing is discontinued and new currency is replaced in it's place. In India there had been a ban on 500 and 1000 rupee notes which is officially announced by our honourable prime minister on 8th November 2016.

Demonetisation is a beneficial practise implemented against corruption. It had a great impact on our country.

Today in the modern world we find many government officials often bribing to complete people's work.This has become a great problem. Government officials, politicians and other rich people are becoming more and more rich while poor people are still remaining poor.This is a thing which is to be considered.

So our respected Prime minister had implemented demonetisation against this. It is implemented as an anti-corruption scheme. This scheme had brought out the real phase of many politicians and great people.

Demonetisation came out as a useful scheme as it has a limit to the amount of money which can be withdrawn per day and had fixed a particular date when all these exchanges should end . During this process many rich people simply threw the money in fright of being caught.any others were being caught and arrested.

Demonetisation was being opposed by many rich people, officals and politicians as they were frightened. But inspire of that demonitisation was successful.

However in some places it turned ot to be a waste. Many rich people got their money back.They were happy as before. Many new 2000 rupee notes were found in some of their houses.

Demonitisation had both benefits and loss. Common people suffered as there was a very big queue for collecting money in the banks.

Inspite of all these it turned out a successful with some people. It was able to reach its target.


Hope it helps u..