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Demonetization

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 The effects  of demonetization  was a biggest challenge for the corrupted people and terror withdrawn thrashing all market transaction. The currency notes were withdrawn to token the problem of financing of terror activities, counterfeit currency and so on.Huge money were being deposited in the bank which were more than limits.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 gold.

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 period.

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
  1. 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.
  2. No transaction charge on debit card payments.
  3. Upto 24,000 /- rupees can be withdraw every week and upto  20,000/- rupees on a daily basis
  4. Business entities can withdraw upto 50,000/- per week be it in a single transaction or multiple transaction.
  5. Method of E-payments was being applied by government employees.
  6. Withdrawl limit has been increased for farmers, and traders and farmers can buy seeds with old 500rupee notes.
  7. 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

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