Demonetization-in-India (1).pptxXXXXXXXX

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1. Demonetization in India Demonetization was a bold and controversial move by the Indian government in 2016 to curb the circulation of black money and promote digital transactions. It involved the sudden withdrawal of high-value currency notes, leading to major disruptions in the economy. by Aryan Singh Rajpurohit

2. Reasons for Demonetization Fight Corruption Demonetization aimed to uncover unaccounted wealth and black money that was being used for illicit activities. Promote Digitalization It encouraged the public to embrace digital payment methods and reduce their dependence on cash. Curb Terrorism Financing Demonetization was also seen as a way to disrupt the funding sources for terrorist organizations.

3. Impact on the Indian Economy Short-Term Disruption Demonetization caused a temporary cash crunch, leading to a slowdown in economic activity and consumer spending. Reduced Inflation The withdrawal of high-value notes helped to reduce inflation and control the flow of black money. Increased Digitalization The move boosted digital transactions and mobile payments, accelerating the transition towards a cashless economy.

4. Effects on Businesses and Consumers 1 Small Businesses Small and medium-sized enterprises faced significant challenges due to the cash crunch, leading to reduced sales and delayed payments. 2 Household Consumption Consumers, especially in rural areas, struggled to access cash, leading to a decline in discretionary spending. 3 Real Estate Sector The real estate market was heavily impacted, with a sharp decline in property transactions and prices.

5. Challenges and Criticisms 1 Cash Crunch The sudden withdrawal of cash led to long queues at banks and ATMs, causing significant inconvenience for the public. 2 Lack of Preparation The government was criticized for not planning the implementation of demonetization properly, leading to chaos and confusion. 3 Uneven Impact The impact of demonetization was disproportionately felt by the poor and marginalized sections of the society.

6. Government Measures and Reforms Digital Payments The government promoted digital payment methods like UPI, mobile wallets, and cashless transactions. Financial Inclusion Efforts were made to increase access to banking services, especially in rural areas, through initiatives like Jan Dhan Yojana. Tax Reform Demonetization was accompanied by measures to increase tax compliance and curb tax evasion.

7. Conclusion and Lessons Learned Short-Term Disruption Demonetization caused significant short-term disruptions, but its long-term impact is still being debated. Promotion of Digitalization The move accelerated the transition towards a more digital and cashless economy in India. Need for Better Planning The government should have planned and executed the demonetization process more effectively to minimize the public's hardship.