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The Demonetisation Decision Success or failure 8 November

The Demonetisation Decision Success or Failure

Definition of 'Demonetisation'

Derivation is the act of separating the currency unit of its position as a legal entity. This happens even when there is a change in the national currency: forms of current form or money are extracted from prevalence and retired, often replaced with new notes or coins. Occasionally, a country changes the old currency completely with the new currency.

 8 NOVEMBER  2016

On November 8, the government decided to close the legal tender position of 500 and 1000 notes. The original objectives were told: to destroy fake currency; Damage the people with black money; And inhibit terror and criminal activities. Later, new objectives were attacked: Enabling the increase in bank credit, turning India into cashless economy, I suggested a cost benefit analysis that the profits were relatively small compared to the costs.

Reasons to demonetize
  • Check the flow of money.
  • Proper taxation, less black money implied.
  • All the next major buy/sell will be happening only through bank transactions which would reduce illegal land selling/buying.
  • Reduce most of the criminal activities, as money transfer requires a paper trail.
  • Which, in turn, gives more money to government. Which (depending on govt. ) can lower the tax rates.
  • Reduce flow of fake currency.
Problems that government is currently facing
  • Illegal transactions by banks.
  • corrupt RBI staff.
  • Bank’s favor to their esteem customers.
  • Hypes media creating.
  • People’s reluctance to accept banking.
  • Some people’s active effort to show this as a failure.


LONG TERM EFFECT
More than $ 3 billion, or more than $ 44 billion in old currency, the State Bank of India along with the same week was deposited only after monetization. The concern was that uncertainty and short-term liquidity squeeze would take some momentum from the Indian economy, which is fastest growing in the world; In particular, areas such as real estate, cash for black money and black money, notorious, "with a decline of up to 25-30% in luxury property prices", was expected to hit the "residential CEO Ashwinder Raj Singh said the services, JLL India


DIGITAL : CASHLESS INDIA
Digital transactions (volume) had increased 42% from 672 million in November 2016 to 958 million in December 2016 but have since declined 20% over two months to 763 million in February 2017.
This puts in peril the government’s target to achieve 25 billion digital transactions in 2017-18, which translates to at least 2 billion transactions per month. The February 2017 figure of 763 million transactions falls 60% short of the monthly requirement.

Congress to observe today (08/11/2017)as 'Black Day'










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