Demonetisation is the act of removing legal tender from circulation. It is also the process of withdrawing currency notes from circulation, especially in India.
The essay based on demonetisation is a great essay that discusses the effects of demonetisation in India. It includes a lot of information and analysis about the issue.
Since the Modi administration banned the old thousand and five hundred notes on November 8th, the nation has been plagued by a cash shortage. The administration has said that everyone would go to the bank and deposit their money by December 30. It was also suggested that individuals avoid using and paying with cash and instead use and pay using digital methods. Let us have a look at demonetization…
What Is Demonetization and How Does It Work?
Demonetization occurs when the government officially shuts the old currency and announces the introduction of a new one. There is no charge for old money or notes after that.
The government, on the other hand, has been granted time to replace old notes with banks so that they may exchange their delayed notes.
When did it take place?
Prime Minister Narendra Modi declared demonetization on November 8, 2016, when he announced the declaration of 1000 and 500 rupee notes in the nation.
Urjit Patel, the governor of the Reserve Bank of India, backed the government’s decision. Following this, the government introduced fresh Rs 500 and Rs 2,000 notes into circulation.
Money from the Underbelly
According to the Reserve Bank of India, there were notes worth Rs 16.42 lakh crore in circulation on March 31, 2016, with 14.18 lakh rupees in the shape of 500 and 1000 rupee notes. The Reserve Bank of India, which was established in 1938, has yet to produce a note valued at more than Rs. 10,000.
Why Does The Government Make This Decision?
Demonetization is a policy used by governments to combat black money, corruption, counterfeit currency, and terrorist operations. People who engage in unlawful activity keep track of their notes. Monopolization harms them directly in this manner. Cash bans are sometimes implemented to discourage cash transactions.
The Centre’s Modi administration also wants the bans on black money, fake currency, and terrorism to be lifted. The ordinary man, on the other hand, experienced many problems as a result of the prohibition. The government is attempting to deter cash transactions as a result of this decision.
Demonetization is seen as a regular practice in Venezuela; nevertheless, little effort has been done to restore the country’s economy. That is why a litter of milk costs approximately 13 thousand rupees and a single egg costs 900 rupees. The most unexpected aspect is that we do not weigh in Venezuela for the purpose of counting the notes rather than the baggage. This implies that instead of a piece of butter, notes are given a lot of weight.
When India Was The First To Recognize Its Importance
In India, it was decided to close the 500, 1000, and 10,000 rupee notes for the first time in 1946. The Ancho Committee on Direct Tax Investigation proposed demonetization in the 1970s, but the proposal got public, and the prohibition was not implemented.
The Janata Party administration of Morarji Desai formed a legislation in January 1978 to close the notes of 1000, 500, and 10,000 rupees. However, the governor of the Reserve Bank of India at the time was opposed to the prohibition.
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