Demonetisation Essay: Demonetisation of the money implies discontinuity of the distinct currency from the transmission and substituting it with a fresh currency. In the contemporary meaning, in India, it is the banning of the 500 and 1000 denomination currency notes as a legal tender. There is a history of the popular decision of the Demonetisation of 500 and 1000 rupee notes. The Indian government executed Demonetisation on November 8, 2016. Read on to find more about Demonetisation Essay.
Demonetisation Essay In English for School Students
The Indian government’s asserted intention behind the Demonetisation plan is as follows:
- It is an effort to make India a corruption-free nation.
- It is done to restrict black money
- It is done to constrain escalating price rise
- To end the flow of capitals to unlawful activity
- To get people responsible for every rupee they own and pay income tax as per the rules of Indian Govt.
- At last, it is a trial to compose a cashless community and build a Digital India.
As a primary step, the government had advised people to open a bank account under Jan Dhan Yojana. They were demanded to deposit all the funds in their Jan Dhan bank accounts and do their upcoming transactions through banking procedures only. Secondly, the government started as an income tax declaration and had given the 30th October 2016 deadline for this plan. With this order, the government was ready to clean up a huge amount of black money.
However, many still hoarded the black money, and to tackle them, the government stated the Demonetisation of 500 and 1000 currency notes. The Demonetisation scheme is being perceived as a monetary reform in the nation but this judgment is full of its own advantaged and disadvantages.
Advantages of Demonetisation
The Demonetisation plan will help India to convert into corruption-free. Those entertaining in accepting bribes will cease from corrupt methods as it will be difficult for them to retain their illegal money.
This step will support the government to trace illegal money. Those people who have illegal money are now expected to dispense income and present PAN for any legitimate financial activities. The government can get a tax return for the income on which tax has not been paid.
The movement will put an end to the funding to the illegal activities that are growing due to unaccounted funds flow. Forbidding high-value money will rein in unlawful activities like terrorism etc.
The prohibition on high-value money will also control the threat of capital laundering. No such action can easily be traced and the income tax administration can find the people involved in money laundering business.
This action will end the flow of fake currency. The maximum of the false currency put in the transmission is of the high-value and the stopping of 500 and 1000 rupees notes will drop the circulation of fake money.
This progress has produced interest amongst those people who had started Jan Dhan’s bank accounts under the scheme of Prime Minister’s Jan Dhan Yojana. Citizens of India can now deposit their money balance under this plan and then it can be used for the development of the country.
The Demonetisation strategy will push people to pay income tax. Mostly who have been protecting their income are now compelled to come ahead to submit their income and pay tax based on it. Although deposits of money up to Rs 2.5 lakh will not appear under Income tax inspection, people are expected to submit PAN for any deposit of more than Rs 50,000 in the capital. It will help the income tax department to trace individuals with high denominations currency.
The final aim is to make India a cashless community by introducing the digital economy. All the financial transaction has to be within the banking procedure and people have to be responsible for each money they hold. It is a large step towards the desire of creating a digital India. If there are benefits of Demonetisation, there are some disadvantages too. Aikyashree Scholarship
Disadvantages of Demonetisation
The decision of the Demonetisation of the money has made huge difficulty for the people. They are rushing to the banks to swap, deposit or withdraw the notes. The abrupt release of news has made the situation uncontrolled. Rages are running high between the crowds as there is a lag in the flow of new currency. It has profoundly influenced business. Due to the cash crisis, the entire marketplace has come to a pause.
Many poor regular wage workers are jobless and their everyday income has ended because owners are incapable to pay their daily payments.
The government is seeing it difficult to fulfill this policy. It has to sustain the expense of issuing the new currency notes. It is also noticing it hard to put new money note into circulation. The 2000 rupees note is a load on the people as no one wishes to do the transaction with such high-value currency. Some authorities think it will only encourage people to use black money more easily in the future.
Moreover, many people have clandestinely dumped the demonetized money notes and this is damage to the country’s economy.
Demonetisation Essay Conclusion
Economists are involved in listing out several more benefits and demerits of this system. The government is stating that there are only benefits of the Demonetisation scheme and this will be discussed in the long term. Former Prime Minister Manmohan Singh who is a famous economist, former RBI governor and former Finance Minister of the nation, calls the Demonetisation move as an ‘organized loot and legalized plunder’.
Despite, if we analyze the advantages versus defects, it will be safe to assume that the past surpasses the latter. Even though there are misery and suffering among the people’s rights at the instant but the estimate is that its advantages will be seen in the long run.
The government is exerting all the necessary measures and steps to reach the currency request and soon the test and distress of the people will be completed with the constant flow of the new currency.
FAQ’s on Demonetisation Essay
What is demonetization?
Demonetisation is the law of tearing a currency unit of its state as authorized tender. It happens whenever there is a variety of national currency or money like 100, 500, 1000 rupees. The modern form or forms of capital is pulled from the flow and retreated, frequently to be substituted with new currency notes or coins.
What are the objectives of demonetization?
The central government of India and the RBI planned three key objectives of demonetization:
- To control black money and corruption by stopping hoarding of money
- To prevent duplication of currency notes
- To fight terrorism by ripping off money funding or money laundering to the terrorist associations operating in India
How many times demonetization held in India?
The first currency ban took place in 1946 for the circulation of notes of 1000 and 10000 rupees. But both the notes were reintroduced in 1954 with an additional introduction of Rs 5,000 currency.Rs 500 and Rs 1000 notes were introduced in 1934 and after four years in 1938, Rs 10,000 notes were introduced.
The second demonetization took place in 1978. Prime Minister of India Morarji Desai announced the currency ban taking Rs 1000, Rs 5000 and Rs 10,000 out of circulation.
What are the merits and demerits of demonetization?
The judgment of demonetization was taken following the national interests at the forefront. Though the judgment might have caused difficulty to the general population, it clearly had the national interest and economic growth at its core. For decades India has been spinning under Naxalism and terrorist activities. Demonetisation, although for a short while, really stopped such anti-national activities, providing relevant companies time to take countermeasures and recognize their funding sources, while supporting India’s economy in the long run.
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