Essay On Demonetization In English Demonetization is the process of eliminating the usage of money, coins, or other assets as legal tender. A certain unit or units of currency are fully forbidden from use by the general public or by the government during the demonetization process. Thus demonetized currency is either intended to be replaced by new currency issued against it or to be deposited in banks and promptly decomposes into scrap.
Essay On Demonetization In English
Essay On Demonetization In English (100 Words)
Advantages to Demonetization
On November 8, 2016, the Indian government made the historic decision to demonetize the Rs. 500 and Rs. 1000 notes. There were a lot of black market and fake currency notes in the Indian market before demonetization. Additionally, there was a significant quantity of untaxed money in the form of physical currency available with people and organisations. To strengthen the country’s economy and financial system, it was important to reintroduce such counterfeit and untaxed currency into circulation.
Introducing Untaxed Income into the Mainstream
There were a lot of ethical participants in the Indian economy before demonetization who weren’t part of the banking system. These were made up of small farmers and businesspeople, and it was necessary to reintegrate them into society.
Essay On Demonetization In English (200 Words)
Demonetization refers to the government’s removal of a currency from usage as legal money. A legal tender that has been demonetized by the government instantaneously turns into scrap and loses value in the market. A government may issue new currency to replace the old one when it removes the old one from circulation.
The objective of demonetization is kept a secret up until the very last minute; otherwise, it would be ineffective. Demonetization’s primary goal is to stop the spread of black money, tax evasion, and counterfeit or fake currency.
The exact goal of demonetization will be defeated if the information about it is somehow leaked, giving tax evaders and owners of black money plenty of time to shift their funds into other lawful forms like land, gold, jewellery, etc.
The Indian Prime Minister, Mr. Narendra Modi, announced the cabinet’s decision to outlaw currency notes with a value of 500 and 1000 rupees in an unplanned address to the nation on November 8 at 20:15. However, it wasn’t the first time; demonetization had previously taken place in India in 1946 and 1978.
Despite the fact that banks and a sizable majority of the people supported the move, political parties and other groups felt that it was ill-advised and would only harm the country’s economy.
Essay On Demonetization In English (300 Words)
Demonetization is the process through which a government discontinues accepting a specific denomination as legal money. Typically, the government replaces the scrapped tender with new money. To combat black money, tax evasion, and counterfeit currency, the Indian government previously proclaimed demonetization three times: the first time was in 1946, the second time was in 1978, and the third time was in 2016.
Impacts of Demonetization
Demonetization has three main effects: it combats black money, tax evasion, and ultimately, it invalidates the value of forged or counterfeit money. The initiative was aimed at the income that was not disclosed and dodged taxation. The majority of the unreported and untaxed money came from illegal activities including smuggling and human trafficking, among others. Anti-national actions like terrorism and naxalism were also funded with this money.
Pakistan, India’s neighbour and the biggest supporter of terrorism in that country, strategically created counterfeit rupees to undermine the Indian economy and finance terrorism and other anti-national actions there. Thus, the decision to demonetize, together with measures to combat domestic tax evasion and unreported stashing of currency notes, had a vital part in preventing the funding for the promotion of unlawful and anti-national activities.
Those who had huge amounts of currency stored were forced to declare it and pay the taxes after the tenders were abruptly scrapped.
Although the nation’s general public may have found the decision to demonetize difficult, it was also vital. Instead of leaving the country at the mercy of foreign conspirators, it is preferable to spend a little while in long lines in front of banks. The measure was necessary in light of the support for naxals, terror, and unaccounted money that was flowing through Indian marketplaces, despite the fact that certain groups may criticise it as a poor choice and a shock to the economy.
Essay On Demonetization In English (400 Words)
Demonetization is the process through which a country’s government formally outlaws coins and notes of a particular denomination. The thus outlawed currency may or may not be replaced by new money. Demonetization aims to combat a number of issues, including criminal activity and the source of its funding, naxalism, terrorism, illegal currency stashing, tax fraud, and counterfeit currency.
India’s demonetization date
The demonetization of legal currency denominations of Rs. 500 and Rs. 1000 was announced by the Prime Minister of India, taking effect at 20:15 on November 8, 2016. However, it wasn’t the first time; demonetization had already occurred twice in India.
The colonial government implemented the first demonetization on January 12, 1946, while India was still subject to the Government of India Act of 1935. To combat tax evasion and other illicit actions, the government decided to outlaw 10 pound notes.
On January 16, 1978, the second demonetization decision was taken after independence. This time, it was decided to demonetize the Rs. 1000, Rs. 5000, and Rs. 10000 notes. The two earlier times, however, vary from the 2016 demonetization in that the prohibited currency was not replaced by a new one.
Effects and Benefits of India’s Demonetization
The demonetization process has a significant impact on a country’s economy. Governments have used it as a weapon to combat corruption and other illicit acts for ages. Demonetization strengthens a country’s economy by eliminating counterfeit money and accounting for untaxed income.
Demonetization is an action conducted with certain goals in mind. To believe that it has a single goal would be a folly. Generally speaking, it acts as a deterrent to numerous unlawful and anti-national conduct. The primary goals in the Indian setting were to stop the circulation of counterfeit money there. Along with reducing counterfeit money, the move aimed to reintegrate untaxed income into society.
India had been battling naxalism for years. Indian naxals obtain funding from a variety of domestic and international sources. The funds used to support anti-national movements are, of course, in high denominations like Rs. 500 and Rs. 1000 and remain hidden from tax authorities. The funding of unlawful and anti-national acts was stopped when certain currency denominations were instantly demonetized, rendering them unusable.
The concept of demonetization is not new. Since the turn of the century, governments have periodically decided to demonetize their currencies. Although the currency that was demonetized may have changed, the goals—to combat inflation, black money, stop illegal activities, remove counterfeit money from the economy, bring unaccounted money under the scrutiny of tax agencies, and eliminate large amounts of untaxed cash accumulated by individuals—have largely remained the same.
Essay On Demonetization In English (500 Words)
Demonetization is the term used to describe a government’s decision to stop issuing certain currency denominations. In order to combat inflation and other criminal activity, governments decide to render certain denomination notes or coins useless. It also serves as a measure to address numerous problems that impede the nation’s overall development.
Demonetization’s effects on the Indian economy
Even though demonetization temporarily disrupted the economy, many favourable short-term consequences are now apparent, and the full scope of demonetization’s effects won’t be seen for another five to six years.
Demonetization had several beneficial consequences on the Indian economy, including bringing back black money, reducing anti-national and illegal activity, and more. But it also led to a great deal of disorder and confusion. Demonetization’s infamous side effects included a lack of currency, lengthy lines at banks and ATMs, a decline in the share market, and a dip in industrial output.
Many small and medium-sized firms closed their doors due to a lack of capital, according to some observers, which negatively impacted the Indian economy and decreased GDP (Gross Domestic Product).
-Introduced Black Money into the Public Eye
99% of the money was recovered and brought back to the attention of tax authorities despite all the negative repercussions of demonetization that have been stated. A total of 15.28 lakh crore was deposited during the demonetization in bank accounts, including the Jan Dhan Accounts of the underprivileged. Tax evaders deposited their money in the Jan Dhan Accounts in order to prevent themselves from losing it.
This money, which had previously been sitting idly in safes and lockers, immediately became taxable, stimulating the economy. The successful eradication of counterfeit currency notes was another outcome of demonetization. After demonetization, the percentage of fake currency notes dropped to a negligible 0.0035%.
– Corruption and Anti-National Activities Instrument
The move to demonetize produced short-term drawbacks but long-term benefits for the Indian economy. Long lines at banks and ATMs, as well as a cash shortage, are immediate inconveniences. Demonetization will have long-term benefits for the Indian economy, including decreased corruption and anti-national activity, a digitalized economy, and more savings, which will ultimately boost GDP.
– The Promotion of a Cashless Economy
After demonetization, there were a rise in income tax returns filed from 43.3 million to 52.9 million. Demonetization had a significant impact on India’s adoption of digital payments, which was one of its main outcomes. People started using digital payment methods because of the lack of cash and the long lines outside banks and ATMs.
Additionally, it slowed down corruption. Both in the public and commercial sectors, the flow of illicit funds between corrupt officials ceased. Large sums of money that had been saved for bribes and other similar purposes were rendered immediately unusable and had to be deposited in banks or thrown away.
Demonetization was decided upon with the welfare of the nation at heart. The decision was made with the nation’s interest and economic expansion in mind, even though it may have inconvenienced the ordinary populace. India has been plagued by naxalism and terrorist activity for decades.