Disadvantages Of Demonetization

990 Words4 Pages
DEMONETIZATION

Demonetization is the act of stripping out a currency unit as legal tender. It happens when change of national currency takes place. The form of money in circulation is pulled out and discarded, which might or often are replaced with new notes and coins. Many a times, a country replaces the old currency with the new ones completely. There can be several reasons why a government wants to enforce demonetization. Some of them are to discourage a cash-dependent economy, to counter inflation, to counter corruption and crime (terrorism, tax evasion), to encourage trade, etc.
There are several advantages linked with the process of demonetization.
The biggest and impactful advantage of demonetization is that it helps the government to locate those people who are the owners of large bulks of unaccounted cash on which no income tax has been registered. This money is earned by corruption and illegal businesses this is also because many people who indulge in earning black money keep them as cash in their houses, villas or in some other secret places. the implementation of demonetization results in discarding all that cash because it has no value and those people are left with two options ; to deposit the money in bank accounts and pay taxes on such large amount or allowing the value of…show more content…
because of very slow procedure many people suffer serious problem. Everyone has their livelihood and problems so they have deal with it anyhow. The demonetization also leads to currency destruction. Individuals have burnt their cash and discarded the same which is a loss to economy .the government has to bear the cost of printing and circulating new currency. This directly affects the tax payers because the cost of printing new currency is deducted from the taxes they
Get Access
Related

  • Advantages And Disadvantages Of Demonetization

    1088 Words  | 5 Pages

    A STUDY ON DEMONETIZATION Monika.K,Geetha.B,Aishwarya.M II B.Com ‘B’ K.C.S Kasi Nadar College Of Arts &Science INTRODUCTION Demonetization is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change of national currency: The current form or forms of money is pulled from circulation and retired, often to be replaced with new notes or coins. Demonetization refers to an economic policy where a certain currency unit ceases to

    Read More

  • Pros And Disadvantages Of Demonetization

    1417 Words  | 6 Pages

    DEMONETIZATION Demonetization is the act of stripping out a currency unit as legal tender. It happens when change of national currency takes place. The form of money in circulation is pulled out and discarded, which might or often are replaced with new notes and coins. Many a times, a country replaces the old currency with the new ones completely. There can be several reasons why a government wants to enforce demonetization. Some of them are to discourage a cash-dependent economy, to counter inflation

    Read More

  • Advantage And Disadvantages Of Demonetization

    1847 Words  | 8 Pages

    DEMONETIZATION Demonetization is the act of stripping out a currency unit as legal tender. It happens when change of national currency takes place. The form of money in circulation is pulled out and discarded, which might or often are replaced with new notes and coins. Many a times, a country replaces the old currency with the new ones completely. There can be several reasons why a government wants to enforce demonetization. Some of them are to discourage a cash-dependent economy, to counter inflation

    Read More

  • The Impact Of Demonetization On Indian Economy

    1165 Words  | 5 Pages

    impact of demonetization on Indian Economy. This wok concentrates on highlighting the advantages and disadvantages of the move by the government . This paper tries to explore the negative and positive aspects of recent demonetization of Indian Economy. The reader of this paper would be getting the knowledge about the pros, cons and consequences of demonetization of Indian economy. KEYWORDS: Demonetization, circulation, Re-monetization, counterfeiting, legal tender. INTRODUCTION: Demonetization is the

    Read More

  • Advantages And Disadvantages Of Black Money

    924 Words  | 4 Pages

    comeback in rural India with the demonetization drive. According to the Wall Street Journal a trader in Orissa gave a kilo of potatoes and cauliflower in exchange for half a kilo of honey. Another interesting observation was people selling their old Rs 500 and Rs 1000 notes on eBay and OLX. You

    Read More

More about Disadvantages Of Demonetization

Get Access