Demonetization Date : Effects and Outcomes { Positive Growth from 2016 to 2024 }

In this article, we will try to tell you what is demonetization date in India, what were its results, as well as what kind of problems the countrymen had to face when and how it was implemented, what effect is being seen and the current situation etc.

Key Points on Demonetization in India :

Demonetization Date in India is 8th of November 2016.

Demonetization is the process by which the government of any country completely bans the high denomination notes prevalent in its country and replaces them with new notes.

The decision of demonetization by the government of any country is always challenging and difficult, but sometimes due to some important reasons in the country, this process is adopted by the government.

This historic decision was taken in the interest of the country on 8 November 2016 by The Modi Government with absolute majority in India.

Old Notes of Rs.500 and Rs.1000 were banned and New Rs.500 and Rs.2000 notes came into circulation in their place.

The citizens of the country were given enough time to exchange the banned notes through Banks.

demonetization date
demonetization date

Demonetization Date: What is Demonetization?

When the government of any country feels that it is necessary to ban the coins or high value notes prevalent in that country, then the government bans those notes or coins and issues new coins or notes in their place, this process is called demonetization. Although this task is extremely difficult and challenging, yet in special circumstances, governments take such decisions from time to time in the interest of their country.

Demonetization is always very difficult for the public because it is a difficult task for the common people to take the hard currency lying at home and get it exchanged from the bank. Because,  for this work they have to wait for hours in banks. Also, there is a limit for exchanging notes every day. No moneylender or merchant or any common citizen can transfer a large amount of money to the bank at one go. These are some such rules due to which the public has to face a lot of trouble, although this decision or process is in the interest of the country.

What was the Need for demonetization in India?

India comes in the category of a developing country, and India is moving towards the category of developed country day by day, and is setting new dimensions of development. The historic decision to curb dangerous activities like corruption, black money, terrorism in India was taken by the Indian government, this decision was taken by the Prime Minister of India, Hon. Narendra Modi himself told all the citizens of his country and urged all the countrymen to maintain peace and provide full cooperation in this work, and he also gave enough time to the countrymen to exchange their old Rs.500 and Rs.1000 notes through Banks.

Some important reasons for demonetization that happened on 8th  November 2016 :-

  1. To curb hoarding of black money.
  2. To completely curb the business of fake notes, so that all fake notes can be eliminated from the market.
  3. To teach a lesson to the people involved in corruption.
  4. To curb the excessive cash transactions that people do to evade taxes.
  5. To curb terrorist activities, so that movement of large quantities of currency notes can be stopped.
  6. To prevent misuse of notes outside the country, so that activities like hawala and money laundering can be stopped.
  7. To stop the dirty game of using excessive currency notes during election campaign.
  8. To fix the country’s economy and inflation.
  9. To promote online transactions and Digital India.

Situation in the country during demonetization on November 8, 2016.

On November 8, 2016, at 8.15 pm, when the Prime Minister took the decision to stop the circulation of Rs.500 and Rs.1000 notes, an atmosphere of chaos was seen all around the country. Most of the people who had kept a large amount of money with them, started buying gold with that money in goldsmith shops. Gold and silver jewellery shops continued to operate till 1 am in the night, as if someone was selling gold for free. Goldsmith also took full advantage of that opportunity.

The next day, outside banks and ATMs. Long queues started forming outside the bank, the bank employees were seen troubled in this struggle the whole day. There is only one discussion on everyone’s lips in the entire country: The Demonetization.

Demonetization brought friendship between Rich and Poor

Such stories were also heard that during demonetization in the country, there were rules for exchanging and depositing only a limited amount of money in banks every day. This was regretted by many rich people who had lot of money deposited with them. Then all those rich people offered to many of their friends and relatives to deposit their money in their bank accounts and in return they would give them some commission. Thus in those days everyone felt this friendship between the rich and the poor.

Demonetization Date: Opposition Parties Reaction on Demonetization?

Due to this decision of the Modi Government, the opposition strongly attacked it and called it a wrong decision of the country. The opposition governments did everything by raising slogans against the Modi government, demonstrating at intersections, expressing anger etc. But the decision of the government remained firm and all the concerned officers of the government and all the employees of the bank supported this decision of the government with full hard work and dedication and worked day and night.

During demonetization, unpleasant incidents happened with the people standing in long queues and people had to face lot of difficulties, on this some media brothers appeared happy with this decision of the government while some showed it wrong.

Demonetization Date: When and how often demonetization in India?

  1. For the first time in India, the decision to ban 500, 1000 and 10 thousand rupee notes was taken in the year 1946. Even in the 1970s, the Wanchoo Committee, which investigated direct taxes, had suggested demonetization, but the suggestion became public, due to which demonetization could not take place.
  1. In January 1978, Morarji Desai’s Janata Party government made a law and banned 1000, 5000 and 10 thousand rupee notes. However, the then RBI Governor IG Patel had opposed this demonetization.
  2. In India, in 2005, Dr. Manmohan Singh’s Congress government had demonetized the pre-2005 Rs.500 notes.
  3. In 2016 also, Modi Government decided to demonetize 500 and 1000 rupee notes. These two currencies captured 86% of the Indian economy and were the most prevalent notes in the market.

Impact of Demonetization in India or Benefits 

The country got many benefits of demonetization:-

  1. The government could get the account of every legal and illegal earning of the public through banks. Every information about the money deposited by the public in their bank accounts could reach the government, and it was possible for the Income Tax Department to take necessary tax action as per the rules against those who deposited more money than required.
  1. Control on terrorist activities. The black money which was deposited with the anti-nationals in the name of spreading terror, was now just a paper, hence the money which was now only a paper, could be used to curb anti-national activities and incidents like terrorism could be curbed. Found that all the money that had been deposited outside the country had been destroyed.
  2. Return of black money. People who had kept large amounts of black money deposited with them, all of it came back into the government treasury and it could be properly accounted  for, this also made it possible to stop black marketing etc.
  1. Promotion of online and digital payments.  There was a decline in cash transactions, which encouraged online transactions and gave wings to the dream of Digital India.  Before demonetization, people were afraid of online transactions, on the other hand, with the advent of facilities like UPI, people are now openly Doing online transactions.
  2. Control on activities like theft, robbery etc.  Whereas most people used to keep large amounts of cash in their homes and were afraid of online transactions, now online transactions have become easier and this frees anyone from having to carry large amounts of cash with them. As a result, activities like theft, dacoits could be curbed.
  3. Elimination of Fake Notes.  Before demonetization, fake notes had established themselves in the market, and due to this, the business of fake notes was increasing and the general public was being cheated, due to the decision of demonetization, all the fake notes were destroyed.
  4. Increase in the number of taxpayers and reduction in corruption. As a result of demonetization, online transactions have got a boost, people keep less cash deposits, due to this the number of tax payers has increased and corruption has also been curbed.

Disadvantages of Demonetization

  1. Problems Faced By The Public. The citizens of the country had to stand in queues for several hours outside the banks to exchange and deposit currency, due to which many people lost their lives and the health of many was adversely affected. Families who were to organize weddings and all had to face a lot of problems in purchasing goods, because online transactions were not possible everywhere.
  2. Excessive Expenditure In Printing New Notes. Printing new notes in place of old notes and releasing them in the market is also a challenging task, which also involves huge expenditure.
  3. Loss of Tourism. People cancelled all their tours, and even those who were going on tourism were spending limited amounts, this had a bad impact on tourism, foreigners also cancelled their tours to India.
  4. Economic Hit. Negative impact was seen in the economic growth rate.
  5. Waste of Notes or Currency. It was seen at many places that people burnt their old notes, threw them in some rivers and at some places threw them in the garbage, all these activities were seen.
RBI report on demonetization of 8th November

An RBI report has revealed that out of the Rs.500 and Rs.1000 notes that were in circulation in the market, about 98 % were deposited back in the Banks, meaning that no significant impact of this entire campaign is to be seen. What is not found is that due to almost all the money being deposited back in the bank, new currency came back to the black money marketers and now it was even easier for them because it is easier to deposit Rs.2000 notes instead of Rs.1000 notes.

 Conclusion:

Demonetization has happened many times in India before, but what happened on the date of demonetization, 8 November 2016, was historical, this step of the government was commendable, the way banks played their role in this work, it is clear that India’s Banks are very strong and capable of withstanding every situation.

Demonetization has provided momentum for development to the country. The purpose of demonetization is quite clear that to curb terrorist activities, trade in fake currency notes and black money marketing, this step by the government shows that the government is capable of taking the toughest decisions for the interest of its country. Although the public and the bank employees had to face a lot of trouble in this work, and almost all the money was deposited back in the banks, but with everyone’s efforts, India successfully completed this decision.

The biggest benefit of demonetization was that online transactions and digitization got a boost in India, where UPI transactions have set records, people’s thinking has also updated.

Friends, hope I have explained all the relevant details of Demonetization other relevant details. How did you like our post, Please Tell us the by commenting in the comment box. if you want to ask any question kindly feel free to ask in the comment box. We try give our 100 percent. Thank you

 

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