By | December 14, 2016



Demonetization refers to  demonetize the currency of a country by its governing body. In other words , demonetization may be defined as losing the value of a currency as a legal tender. The main aim of demonetization is to reduce the red trap i.e corruption.

Recently in India , the government led by prime minister , Mr. Narendra Modi has demonetized the 500 rupee and 1000 rupee currency notes. Majority of the people are welcoming this brave decision by the government whereas a lot of people are criticizing this decision. Let us see the positive and negative impacts of this decision of demonetization.

  • Curbing corruption Demonetization will reduce the corruption in the country as the people who owns a huge amount of black money will have to show the records for holding undisclosed money.Mostly the black money is held by people in 500 and 1000 rupee notes.It is also heard that people are putting their black money on the fuel to save themselves from penalty of being arrested in some parts of the country. The are having sleepless nights.
  • Reduction in terrorist funding : the demonetization has led to the reduction in terrorist funding. The terrorists are paid in indian currency of 500 and 1000 rupee notes.As a result of these currencies being valueless , the masterminds of terrorists are not able to work out as per their plans.
  • The emergence of cashless transaction culture
  • Growth of the  economy in the long term context.
  • Registration of new income tax payers, linking or accounting physical asset investment to PAN.


As the coin has two faces,It has to face some criticisms. some of them are as follows:

  • People have to be waiting in long long queues leaving their jobs for exchanging the notes.
  • A lot of people have already died due to lack of money as the hospitals are not admitting them.
  • A lot of people have committed suicides due to lack of awareness.
  • The queues before banks and ATMs are not getting shorter.
  • People are crying all over the country due to lack of money.
  • Major functions like marriages are frequently hit by it.
  • Businessmen specially the small one are worse affected.
  • Small Traders are not capable of doing trading on a smooth basis.

So from all this ,I suggest the people not to worry too much .The government should take the problems of common people into consideration and make suitable arrangements for combating these problems.People should be fully aware of this concept.And if all these problems are once short out,Demonetization will prove to be a  very good step taken for the development of the country.



Hope you all will like this post.Thank you.

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