One year of demonetization: How much note ban has changed India
D.Shalini, II M.Com.
K.C.S.KasiNadar College of Arts & Science, Chennai – 21
The demonetization had a great significant and immediate impact on the state of the Indian economy.It also resultsthat demonetization helps to destroy black money is the first ranking given by the respondents and it is followedby corruption, terrorism etc..
Demonetization is the most important and necessary when there is a change of national currency. Theold unit of currency replaced with new currency. Demonetization is the process where government declares thecurrently running currency notes illegal to be tender after the declaration is made. There are both pros and consof demonetization in the Indian economy. The reasons for demonetization are to control counterfeit notes thatcould be contributing to terrorism, and to undermine or eliminate the “black economy”. There are somepotentially ways in which the pre-demonetization money supply will stand altered:…show more content… This part of the currency will be extinguished since it would notbe replaced in any manner. The government might choose to replace only a part of the currency which was in circulation as cash.
In the other words, the rest would be available only as electronic money. This could be a mechanismused to force a transition to cashless medium of exchange. The empirical extent of these two components will be unraveled only over the next six months. These two would have different effects on the economy in the short term and in the medium term, aswill be explored below.