DEMONETISATION OF INDIAN CURRENCY

What is demonetization? Demonetization is the act of stripping

a currency unit of its status as legal tender.

Demonetization is necessary whenever there is a change of national currency.

The old unit of currency must be retired and replaced with a new currency unit.

Demonetization of Indian currency The demonetisation of 500 and 1,000 banknotes was a ₹ ₹

policy enacted by the Government of India on 8 November 2016, ceasing the usage of all 500 (US$7.40) ₹and 1,000 (US$15) banknotes of the Mahatma Gandhi ₹Series as legal tender in India from 9 November 2016.

The announcement was made by the Prime Minister of India Narendra Modi

The banknotes of 100, 50, 20, 10 and 5 of the ₹ ₹ ₹ ₹ ₹Mahatma Gandhi Series and 2 and 1 remained legal ₹ ₹tender and were unaffected by the policy

Scenario after demonetisation Hospitals, petrol pumps and institutes

were exempted for few days. No deposits should be greater than 2.5

lakhs. Exchange limit was set to 4000.

Purpose of demonetization of Indian currency An effort to stop counterfeiting of the

current banknotes allegedly used for funding terrorism, as well as a crack down on black money in the country.

The move was also described as an effort to reduce corruption, the use of drugs, and smuggling.

Advantages of demonetization in India Cashless and digital economy To eradicate corruption and black

money. To remove smuggling and terrorism

activities. Development of economy. Easy to track the money which is being

exchanged in banks.

Disadvantages of demonetization in India Lack of cash availability in banks Reduced money circulations Increase in fraudulent activities by

banking personnel. Unfavorable impact on GDP growth Black money holders searching for

different alternatives to come out from the situation.

Reasons for demonetization To tackle black money in the economy. To lower the cash circulation in the

country which "is directly related to corruption in our country,

To eliminate fake currency and dodgy funds which have been used by terror groups to fund terrorism in India.

Exchange of old notes

The Reserve Bank of India laid down a detailed procedure for the exchange of the demonetised banknotes with new ₹500 and ₹2,000 banknotes:

Initially, the limit was fixed at ₹4,000 per person from 8 to 13 November 2016.

This limit was increased to ₹4,500 per person from 14 to 17 November 2016.

The limit was reduced to ₹2,000 per person from 18 November 2016.

Go cashless go digital E Wallets – Paytm, Freecharge etc.. UPI – Unified payments Interface Apps Plastic Money – Debit/Credit Cards Net Banking – Online Fund Transfer Aadhaar Card – Aadhaar Enabled

Payment System

IMPACT OF DEMONETISATION ON GDP

Ban on 500 and 100 notes

New notes of 2000 and 500

News about demonetisation For Now, Cash Ban Is Hurting Comm

on Man. But Change Ahead Chandan Mitra | Saturday November 12,

2016 Only the fat cat money bags will be left

crying over their loss of power and pelf once the rest realize the benefits of demonetization far outweigh the temporary inconvenience.

Restaurants Face Steep Revenue Loss But Still Support Demonetisation

Harnoor Channi-Tiwary | Thursday November 24, 2016

Though many businesses across industries have been hit, the food industry has faced a direct brunt of this move.

Team Modi Must Plan For These 4 Big Disruptors To The Economy

Opinion | Yashwant Sinha | Wednesday November 23, 2016

What is important for us politicians to remember however is that the aam aadmi is not concerned with theories. He wants results, and if we fail to provide the people with job opportunities in adequate numbers, they will be disappointed.

Goa To Be India's First Cashless Society: Defence Minister Manohar Parrikar

India News | Press Trust of India | Friday November 25, 2016

Strongly backing the demonetization decision, Defence Minister Manohar Parrikar today said Goa is on its way to become India's first cashless society.

BJP Launches Drive To Raise Awareness On Cashless Transactions

India News | Press Trust of India | Tuesday November 29, 2016

In the wake of Prime Minister Narendra Modi's call for a "cashless society", the Delhi unit of BJP has launched an initiative 'My Mobile-My Bank-My Wallet' to create awareness regarding various modes of online and cashless transactions.

GDP At 7.3%, Not Reflecting The Impact Of PM Modi's Risky Notes Ban Agencies | Wednesday November 30, 2016 July-September will be the last quarter before

the impact is felt from PM Modi's bold and risky move.

Situation 'Not Absolutely Normal' But Ready For Pay Day, SBI Tells NDTV India News | Written by Sreenivasan Jain |

Wednesday November 30, 2016 As banks across India, hit by the cash

shortage, gear up for pay day, a top official of the State Bank of India or SBI has claimed that India's largest bank is prepared for the rush.

Currency Ban A Step To Make India Economic Superpower: Rajnath Singh India News | Press Trust of India | Saturday December 10,

2016 Describing demonetization as a step towards making India

an economic superpower, Union Home Minister Rajnath Singh said that only a courageous and far-sighted Prime Minister could have taken such a bold decision.

Tax Collection Has Gone Up After Demonetisation, Says Finance Minister Arun Jaitley: Highlights India News | Tuesday January 10, 2017 Finance Minister cited robust tax figures to counter

naysayers who said that the economy took a big hit after the notes ban. The collection in central excise duty - which related to manufacturing - surged over 31 per cent in December 2016 alone, as compared to the December 2015 figures, he said.

Impact of note ban on E-business

With the ban on Rs 500 and Rs 1000 currency notes, eCommerce players were forced to stop “cash-on-delivery” payment modes on their site. Certain eCommerce players like Flipkart and Snapdeal made restrictions on the order purchase value to below Rs 1000. With fall in CoD orders, demonetization has led to jump in digital payment options for making online transactions.

Impact of note ban on Real Estate The demonetization move hurted the

customer demands for home and forced builders to decrease the price of their real estate properties.