Pros And Disadvantages Of Demonetization

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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 benefit of demonetization is that it assists 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 villas , farmhouses,houses 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 cash in bank accounts and pay the taxes on such large amount or
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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 make space in the taxes they impose for 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

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