Demonetization is the act of relieving a currency unit of its status as a
legal tender. Due to change in nation currency the ongoing forms of money is
discarded and a new form of money is being established with new notes and coins.
It is established to upgrade the economic standard of a country. Many countries
since years has introduced demonetization in there own country. To control
situation such as inflation and to boost economy, On 8th nov 2016 Prime Minister
of India has announced of sudden demonetization of rupees 500 and rupees 1000.
This notes can be exchanged in the bank till 31st December 2016 but this notes
won’t be legal for transaction. There were certain limit for the with-drawl of
cash from a bank. One of the factor for introducing demonetization in a country
was to uproot the corruption & black money. The currency demonetized thrice in
our country, the very first demonetization was held on 12th January 1946, the
second demonetization was held on 16th January 1946 and the third demonetization
was held recently as mentioned above.
It was an biggest step towards digitalization for our country. 86% of currency
notes. The effects of demonetization was a biggest challenge for the corrupted
people and terror withdrawn thrashing all market transaction. The currency notes
were withdrawn to token the problem of financing of terror activities,
counterfeit currency and so on.Huge money were being deposited in the bank which
were more than limits.
On the other side of the hand credit card, debit card and e-wallets were
increased tremendously whereas the service sector were mostly affected during
demonetization because they were mostly depend upon cash transaction.
The increase in price of gold during this period has affected many middle class
families some of the restrictions have been placed for the possession of gold
such as married women in India cannot keep more than 500gms of gold, for
unmarried women it is 250gms whereas male members of a family can keep 100gms of
The economic survey during 2017-18 GDP rate grows from 7 to 7.5%. There is
rapid increase in the export growth while decline in import rate growth. This
shows that demonetization and GST receding. The income tax collection department
has touched a high rate of growth due to this Demonetization. And GST. 2017-18
has seen a rapid increase in GDP.
The equity funds were least affected by the introduction of demonetization as
more people invested there so there was more money entered into the fund market.
Whereas the secondary market were mostly affected as all transaction are being
done through cash only. Demonetization has affected hawala Rackets mostly. money
laundering and terror funding was one of the way of hawala rackets. The money
that has been wrecked by these rackets was also all over the news.
Fake currency was trending around the country through Hawala rackets. T his fake
currency was leading to terrorism. demonetization has shut down all these fake
market around the country. Stone pelting has been abolished with the
establishment of Demonetization. Every year Lots of money is being sent by the
Pakistanis to the Kashmir people to create chaos then and there only. Middle
class and Lower middle class family faced a huge crisis during demonetization
They mostly depend upon cash to meet there daily needs. many people has lost
there job during this period which lead to affect there health. Demonetization
has created both negative as well as positive impact in our society.
Certain steps has been followed under demonetization
- Under deputy governor special task officer has been introduced who will
look after the plans for quick recalibration of ATMs to enable them to
dispense new bank notes of rupees 500 and 1000.
- No transaction charge on debit card payments.
- Upto 24,000 /- rupees can be withdraw every week and upto 20,000/-
rupees on a daily basis
- Business entities can withdraw upto 50,000/- per week be it in a single
transaction or multiple transaction.
- Method of E-payments was being applied by government employees.
- Withdrawl limit has been increased for farmers, and traders and farmers
can buy seeds with old 500rupee notes.
- Some of the arrangements for public like there will be separate queue
for senior citizens and exchanging of notes. pensioners need to submit there
life certificate in the banks.
The sudden movement by the government to demonetize the old currency and replace
it with new currency notes was a big step towards eradicating terrorism,
corruption, illegal money, counterfeit currency. it created a big chaos around
the country but on the other side increase in the GDP was a big achievements.
It was a tough task for general public to stand outside the bank for hours to
exchange notes. many people supported and said India is growing as a developed
nation while some negative reviews came from the public. The black money either
went by paying taxes or reached banks directly or indirectly. Demonetization has
created a positive impact on the society as it supported digital mode of payment
and with the time it will be proved that DEMONETIZATION will create a great
impact in our society in a long term.
Award Winning Article Is Written By: Ms.Unnati Sarangi
Authentication No: DE34291989901-7-1220