What Is Demonetization?

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IMPACT OF DEOMONETIZATION IN INDIA

The demonetization is affected in all over India. From layman to big businessman is affected from that.

* Good Impact of demonetization

- First impact is on layman people they have lower expenditure power. Due shortage of cash people are satisfying with low expenditure. They realised that they can live with low income and expenditure. If people can start using cash less transaction they will aware about bankin sector and benefits of banking sectors.

- Second effect is on banking sector. Because people are started cash less transaction for many purpose. Due to demonetization bank faces the problem of shortage of cash but bank will can get benefit because people can deposit all money into bank, people can started using cash less transaction for that

- Third effect is black money. Due to demonetization all black money in the form of old currency become a only a waste paper. Many people destroyed their black money with the fear of income tax department.

- Forth effect is on corruptions. People are started using cash less transactions. Because of that corruption is gone away. Government can watch the transaction therefore people can not go to the way of corruption

- Fifth effect is on terrorism. Due to demonetization all fake note gets ban. Therefore funding to terrorism will be stopping. People will start cash less transaction and therefore government have few notes of circulation and keep watching on this

Bad effects of demonetization in India

- First effect is on layman. People are standing in long queue for exchanging their own money.

Specially in rural area there are people are based on cash transaction suddenly they can not able to change our self.

- Second effect is on small trader or businessman. Due to demonetization the sale is decreases. They found lots of problem for depositing their legal money.

- Third effect is on banking sector. Bank will distribute all new currency to the public. They don’t have sufficient money to give loan to others. They have workload during the demonetization. They facing lots of problems regarding crowd management.

Demonetization is not the new concept. Many country demonetize their currency for black money, corruption etc. Following is list of those country who tried demonetization of their currency.

- Soviet Union

In the year 1991, Mikhail Gorbachev Government banned the currency note of Ruble 50 and 100 in Soviet Union to end black money in country. Government expected that it will decrease the market of black money. But this decision of Gorbachev took a very wrong turn and people started doubting on government and because of this he also faced the problem of change government.

- Ghana

In 1982, government of Ghana demonetized currency notes of Cedi 50 to control black money in country. But after this people lost their faith from the economy policies of the country, and after few days, when time period of exchanging notes ended then crores of money were found on roads.

- Britain

Before 1971, pon