Demonetisation and its impact on indian economy

this ppt describes why demontisation is necessary in order to take out the black money and what are the various pros and cons of demonitisation.

1. DEMONETISATION AND ITS IMPACT ON INDIAN ECONOMY

2. DEMONETIZATION Demonetization is an act of stripping a current unit of its status as legal tender. It occurs whenever there is a change in national currency. Demonetization for us means that RBI has withdrawn the old Rs. 500 and 1000 notes as an official mode of payment. It means that Rs. 500 and 1000 notes will not be accepted by anyone except the organization declared by the government.

3. HISTORY OF DEMONETIZATION

4. WHAT HAPPENED DURING DEMONETIZATION? On 8 th November 2016, Government of India had announced that from today onwards Rs. 500 and Rs. 1000 currency notes will not be a legal tender. It means that Rs. 500 and Rs. 1000 notes will not be accepted by anyone except the organization declared by the Government. Public can deposit and change the currency from the banks and post offices till 30 th December 2016.

5. DEMONETIZATION PROCESS

6. MAJOR AIM OF DEMONETIZATION Making India a CASH LESS SOCIETY

7. Why were Rs. 500 and Rs. 1000 notes demonetized? To fight black money and corruption in the country by preventing hoarding of cash. To fight terrorism by cutting off funding in cash. To prevent counterfeiting of currency notes. Transition towards a less cash economy or push for digital transaction.

8. PERCENTAGE SHARE OF DENOMINATIONS BEFORE DEMONETIZATION 2% 1% 1%

9. CURRENT SITUATION DUE TO DEMONETIZATION IN INDIA According to a 2018 report from the RBI, approximately 99.3% of the bank notes or Rs. 15.30 lakh crore of the Rs. 15.40 Lakh crore demonetized were deposited with the banking system. The bank notes that were not deposited were only worth Rs. 10720 crore. This stated that the effort to remove black money from the economy was failed.

10. PROS AND CONS OF DEMONETIZATION ON INDIA ATTACK ON BLACK MONEY HOARDERS. DEATH KNELL TO FAKE CURRENCY RACKETS. END OF TERRORIST FUNDING. TRANSPARENCY. END OF HUGE DONATIONS. TOWARDS A CASHLESS ECONOMY. CONS RUSH AT BANKS. SHORTAGE OF MONEY TO COMMON PEOPLE. STOCK MARKET. PROBLEM FOR HOUSE WIVES. SHORT TERM INFLATION. MARRIAGE SEASON. PROS

11. PROS OF DEMONETIZATION ATTACK ON BLACK MONEY HOLDERS People who possess huge amounts of black money in hard cash are at a complete loss now. DEATH KNELSS TO FAKE CURRENCY RACKETS Most of the currencies used to be in the denomination of Rs. 500 and Rs. 1000.

12. END OF TERRORIST FUNDING Huge sums of money especially in hard cash in the denominations of Rs. 500 and Rs. 1000 was used to fund Islamic terrorists, Naxalites . TOWARDS A CASHLESS ECONOMY It is practically impossible to have a 100% cashless economy, the proportion of hard cash in the economy will decrease and our economy will get more digitalized.

13. TRANSPARENCY Online transaction= More transparency=financial intelligence unit will track all online transactions. END OF HUGE DONATIONS Huge amounts of donation that is taken in the private education and healthcare sectors would be stopped.

14. CONS OF DEMONETIZATION IN INDIA RUSH AT BANKS People will forget everything and jump to the places where the banned notes are being officially exchanged. SHORTAGE OF MONEY TO COMMON PEOPLE

15. STOCK MARKET Due to currency being scooped out of the market couples with Trump’s victory, the mood at the stock was completely bearish. PROBLEM FOR HOUSE WIVES The accumulated money of our respected Indian housewives is of no use now until they exchanged the currency with the banks and post offices.

16. SHORT TERM INFLATION Due to shortage of money in the market, a short term cost push inflation occurred. MARRIAGE SEASON Difficult for those families who had weddings.

17. EFFECT ON PARELLEL ECONOMY EFFECT ON PRICES EFFECT ON MONEY SUPPLY EFFECT ON BANKS EFFECT ON DEMAND EFFECT ON ONLINE TRANSACTIONS IMPACT OF DEMONETIZATION IN INDIA

18. CONCLUSION India has become more digitalized. The advantages are much dominating and it will be in the long run interest of our country comfortably outweighing the disadvantages. Government need to take all the necessary steps so as to ensure that there will be a smooth flow of currency exchanges. It made a massive change in our economy.