Though, it was re-introduced in 1954 but later, in 1978, the then Prime Minister Morarji Desai in his intensive move to counter the black money, introduced The High Denomination Banks Act Demonetisation and declared Rs 500 , Rs 1000 and Rs 10,000 notes illegal. Now even the small transactions have started going through banking channels and the small savings have turned into a huge national asset. Tempers are running high among the masses as there is a delay in the circulation of new currency. There are two basic elements to this definition. Over 100 lives were lost.
Students would be interested in writing an essay on this fascinating and pertinent topic and may consider how other countries may also profit from replicating this intricate monetary move. Industrialist criticised the demonetisation, saying that not just the execution, but the concept of demonetisation was wrong in itself. In the days following the demonetisation, the country faced severe cash shortages with severe detrimental effects across the economy. Accordingly it brought down the rate of inflation during the months that followed demonetization. The tax compliance had increased with number of income tax returns filing increased but majority of them were from salaried and non-business class. The government has maintained that the Income Tax Department is examining about Rs 1. In 1936, Rs 10,000, which was the highest denomination note, was introduced but was demonetised in 1946.
These objectives have always been debatable for the lack of accurate verifiable data. The scheme was introduced by government to eliminate black money and counterfeiting. Impact of Demonetisation on Indian economy In a country where 85% of transactions take place by cash, cancelling the legal tender character of two high denomination banknotes arises a lot of questions. Earlier, this year media reports said that cash crunch was witnessed in some states due to the fewer number of Rs 2,000 notes available in circulation. Key points describing success of demonetisation are: Rate of Inflation goes down Prices of commonly consumed commodities like Pulses, fruits, vegetables had gone down substantially post demonetization.
The employment rate fell from 42. The former welcomed the demonetisation move by calling it bold step. Small households and consequently the labour-intensive sectors have been the most affected. Cement and steel industry A temporary decline in sales can be observed in the cement and steel sectors which are closely linked to real estate. The short-term policy effects are chaotic.
According to the panel, demonetisation created significant disruption throughout economy, because it was carried out without prior study or research. The government intends to exchange the old currency notes by December 30, 2016. As the cash shortages grew in the weeks following the move, the demonetization was heavily criticised by prominent economists and by world media. Modi stressed that the move aimed to achieve important objectives, specifically reducing terrorism financing, curbing corruption, and inhibiting tax evasion through black money. In fact, the rural farm sector has been doubly hit because in addition to losing employment and income. Example of 3 Body Paragraphs To write the body, you must follow the flow of your thesis. The view of early Judaism treating foreign deities as devils and later Judaism treating them as non-existent is not universal.
Ensure that each paragraph has a topic sentence and sufficient evidence and arguments afterwards to support the former. Migrant workers were adversely affected by demonetisation. It was estimated that this decrease in income for the government could cause the fiscal deficit for the financial year 2016-17 to increase from the targeted 3. Many Indians switched to — a big deal in a country of 1. According to a 2018 report from the , approximately 99. There was a decrease in the terror activities in.
Business Standard India — via Business Standard. Since banks are sure to accumulate huge deposits in the months that follow, the borrowing cost for Banks will be reduced. The banned banknotes constituted 86. When the physical euro bills and coins were introduced, the old national currencies, such as the , the and the Italian lira were demonetized. There has been no significant change in the number of detection of counterfeit banknotes detected. While the year 2019 will bring with it formation of new Government after the elections in April 2019, the after effects of Demonetization that happened on November 8, 2016 still haunt the Indian Economy.
The surrender rate had reached its highest. Such negative shocks get transmitted across the economy in a multiplicative manner. Presently, banks and business people as well as consumers are not fully prepared to take on the immense impact of losing certain currencies on everyday business transactions. A better route to formalise the economy would have been to widen the ambit of the labour laws so as to include more workers under its purview. App downloads for Paytm increased by 300%. The author thanks Anjana Thampi for her useful inputs.