Short essay on Demonetization and its effects

Non-monetization means to extract existing currencies in the form of bank notes or coins and issue new notes or coins at that location. This is the process of invalidating the value of the circulating currency.

The currency loses a valid bid and the seller no longer accepts them in return for merchandises sold

For example, on 8 November 2016, the Government of India converted the issuance of 500 rupees and 1,000 rupees into currency. The legal currency of these currencies is invalid and people can not use this currency for any transactions. They need to deposit unauthorized bills in the bank or exchange old notes with new notes.

In the long term, non-monetization is considered to bring good results in general because it promotes digitalization of the economy. If the economy is mainly cash based and there is a large amount of cash transactions, there is a possibility that digital economy will be promoted by non-monetization. As people deposit physical cash into their bank account, the possibility of using the digital model when making payments increases.

Fake currencies are filtered and can not be deposited or exchanged. This will help the government fight the problem of counterfeit money.

The non-monetization process also helps the government track undiscounted amounts or unpaid income tax cash. For non-monetization, people with hidden income may report income and pay taxes.

Prohibiting high value currencies will also reduce illegal behavior. This is because most of these activities are funded in cash from people with illegal activities.

Trade and economy are affected at least in the short term. The result of non-monetization is that suppliers and consumers need some time to adapt to the new monetary policy, which may lead to trade confusion. Deceleration of the national economy due to confusion and confusion. Because there is no large currency face value, there is little liquidity, so this may lead to tightening of cash. Overall demand for products, especially luxury goods, is adversely affected in the short term

I feel that it is difficult for illiterates to operate via mobile wallets, credit cards or online banking facilities. Even in a short period of time, if they refuse to cash transactions, it becomes very painful.

Elderly people can not wait for hours to deposit invalid currency into their bank account

These are some of the impact of democratization on the nation and the economy, but inhumanization has given some lessons to individuals and changed the way we manage finances. Monetization can be monetized to maximize revenue either by switching to a monthly investment plan for better storage or conversion to FD (time deposit), which is easy to acquire safe cash piles It will be. Due to democratization, the income of the government has increased, and its initial influence has spread to the prohibited income tax return. Non-monetization has played an important role in leading digital and financial planning to the forefront of many people. India is enduring the direct chaotic impact of non-monetization, and it is clear that hard returns will begin to emerge over the coming months.

Non-monetization is an unforgettable experience of the generation and will be one of the economic events of our time. All Indian citizens can feel the influence. Non-monetization influences the economy through liquidity. The influence is convincing because almost 86% of the circulating currency value is revoked without replacing most of the monetary value. With the withdrawal of 500 rupees and 1,000 rupees, there is a big gap in currency composition after 100 rupees, 2,000 rupees is the only denomination

The non-monetization policy introduced by India is part of ongoing fiscal reform. However, such decisions have advantages and disadvantages. Implementing nonmonetary policies means that certain currencies will be replaced with new currencies. In India, the decision to non-monetize 500 rupees and 1000 rupees as a legal currency is aimed at achieving specific goals. The Government of India has enacted this policy to fight corruption. The non-monetization policy is aimed at restricting black money and suppressing price rise