Demonetization Essay

Demonetization Essay

You can also find more Essay Writing articles about events, people, sports, technology, and many other things.

Essay on Demonetization

Demonetization Essay: When money is demonetized, it means that the old currency is taken out of circulation and a new currency is put in its place. In the modern sense, it means that the 500 and 1000 rupee notes are no longer accepted as legal money in India. The decision by the people to get rid of 500 and 1000 rupee notes has a long history. On November 8, 2016, the Indian government did Demonetisation.

A Brief History of Demonetization

India has seen the process of changing the country’s currency in a single night before. Mohammad Bin Tughlaq changed his dynasty’s money in the 14th century as a way to keep things running smoothly. Even though he never did anything wrong on purpose, most people didn’t like him because of how much trouble he caused. This move was based on the money that was being used in Iran and China at the time.

In the last seven hundred years, there have been a lot of changes to the way Indian society works. So, it’s not fair to compare and draw parallels between the history of demonetization and what’s happening now.

From a geographical point of view, Demonetization has been tried in many countries on many different continents. In some places, it worked out well, but in others, it was a disaster.

In Australia, there was a lot of counterfeiting or making fake money. In order to stop this, the Australian government switched from paper money to plastic money. There was no bad effect on the economy of the country from taking such a step. The fact that Australia is a developed state means that its economy can handle these changes without any negative effects.

Nigeria, Ghana, and Zimbabwe all stood in very different places. All of these countries were in so much debt that they stopped using their old bills, but the resulting inflation caused their economies to collapse.

People in Myanmar and the Soviet Union did not react the same way. Due to Demonetization, there were a lot of protests in Myanmar and the Soviet Union broke up after a coup. India is a very different place, and Demonetization was done to reach certain goals. So, Demonetization didn’t have the same effect on India’s economy and society as it did in any of these other countries.

The goal of India’s “Demonetization” policy was to cut down on the amount of “black money” that was being used in the country. Because the currency changed, everyone had to say how much cash they had. So a lot of money had to answer for it. This caused tax rates to go up a lot. But this benefit was only for a few parts of the economy.

India’s reaction was mixed. Demonetization had both good and bad effects on a lot of things. When a new policy is put in place in any country, developed or not, it takes time to figure out how it will affect the country. So, it’s very important for the government to think about not just the short-term effects of a decision, but also the long-term effects.

Demonetization is one of the most important things the Indian government has ever done. To stop corruption, it was nothing less than a financial revolution. But it is an ongoing process that the government will look at from time to time. Even though there are some problems with the policy, the main goals of “Demonetization” have been met. The policy’s flaws can be fixed, but it should be praised for being in the national interest.

500 Words Essay on Demonetization

Demonetization is the process of taking a currency’s legal value away. When money is demonetized, it stops being used and is taken out of circulation. Also, this kind of money is replaced with new bills or coins. Sometimes, a country completely replaces its old money with a new one. Most importantly, demonetization is when a government stops allowing certain denominations of bills or coins to be used.

Advantages of Demonetization

1. Demonetization has cut corruption by a huge amount. Because of Demonetization, black money trades stop all of a sudden. By doing Demonetization all over the country, the government throws the future of corrupt people into strict darkness.

2. By putting in place Demonetization, the government’s debt is cut down. Liquid money has less risk and liability as well. It is much easier to deal with soft money than hard currency. Demonetization also lowers the amount of debt the government has to pay.

3. One of the biggest effects of demonetization is that it makes it easier for some people to avoid paying taxes. The Income Tax people will keep track of the money that was put in. So, people who are known for not paying their taxes will be less likely to do so. This will help the government fill its coffers in the right way. The loan transaction will also be looked at. The flow of taxes will go up. This will lead to the government putting in place different measures to help people.

Challenges faced by Demonetization

1. One of the biggest problems with Demonetization is that it makes it hard to connect to the internet. Digital transactions are being pushed everywhere, so most people will stop using cash. But not everywhere in the world has a good way to connect to the internet. In countries that are still developing, certain policies should be put in place first, along with the right infrastructure.

2. Lack of cash is another effect of demonetization. Lack of money makes it impossible to avoid chaos. During the Demonetization of Indian banknotes in 2016, this is exactly what happened. People had a lot of trouble exchanging and depositing banknotes that were no longer legal tender. A few unintended deaths also happened because of this decision.

3. Most of the bad effects of demonetization are felt in the countryside. Cash is needed for everything in agriculture. Also, people in rural areas don’t know enough about money to deal with the situation. Nearly 80% of the rural people in India have never heard of the term “digital transaction.” Also, many people still don’t know how to use computers, and there isn’t a cashless economy yet. During the Demonetization in 2016, this group of people was hit hard.

600 Words Essay on Demonetization

When a government bans coins and bills of a certain value, this is called demonetization. The banned currency might be replaced by the new currency, or it might not. The goal of Demonetization is to deal with a number of issues, such as illegal activities and how they get money, terrorism, tax evasion, and fake money.

Effects of Demonetization

Demonetization affects the economy of a country in the long run. People in rural areas who couldn’t use the internet or plastic money were hit the hardest. Since the Middle Ages, it has been used by governments as a way to stop corruption and other illegal activities. So, Demonetization helps a country’s economy by getting rid of fake money and making black money legal.

Positive Effect of Demonetization on Economy

• How Black Money Is Broken Down: When black money builds up in a country, it hurts the economy. Demonetization helps close down businesses that use black money and wipes out people’s savings in black money, which is good for the economy.
• The drop in counterfeit money: The economy of the country is hurt by the amount of fake money that is being used there. So, Demonetization helps get rid of fake money that has a high value.
• Increase in Bank Deposits: Old currency notes can’t be used anymore, so people who still have them should put them in the bank so their money doesn’t go to waste. Because of this, cash worth trillions of rupees is put in banks.
• Real Estate:- Black money is used a lot in the real estate business. By stopping the flow of illegal money into the real estate market, demonetization makes sure that everyone gets a fair shot.
• Digital transactions are on the rise: The lack of cash on the market makes people more likely to do business online. Almost everywhere in the country, machines that take debit and credit cards are being put in place. People start to use plastic money over time. This is a great way to find people who don’t pay taxes.
• Stopping the flow of money to terrorist groups: Anti-nationalists give money to terrorist groups in the country to help them do their bad things. With this money, terrorists can buy weapons and plan attacks in different parts of the country. Demonetization helps a lot to cut down on the money that terrorist groups can use to help themselves. So, it helps keep the peace and makes the country better off in many ways.

Negative Impact of Demonetization on the Indian Economy

Most of the good things about demonetization will last for a long time. After demonetization, the country’s economy might start to grow in a few years. But demonetization has had a huge effect on the Indian economy in a bad way.

Many small businesses that depend on cash are left to starve. Many industries that make things lost a lot of money, which hurt the economy of the country. Also, many shops and factories had to close. This affected not only the businesses but also the people who worked there. So, many people lost their jobs, especially the laborers.

There isn’t enough cash because banks are exchanging old bills for new ones. People said that the government was bad at planning and running things. Indian National League also asked the Madras High Court to overturn the decision to demonetize by filing a Public Interest Litigation (PIL). But the Court wouldn’t change what the government did with its money.

Demonetisation Essay In English for School Students

The Indian government says the following is the goal of the Demonetisation plan:

• It is an attempt to get India to be free of corruption.
• It is done to stop the flow of illegal money
• It is done to stop prices from going up too fast.
• To stop the flow of money to illegal activities
• To make sure that everyone is responsible for every rupee they own and pays income tax according to Indian Government rules.
• At last, it’s time to try to build a cashless community and make India digital.

Advantages of Demonetisation

Pros of Demonetisation: The plan to get rid of old currency will help India become free of corruption. Those who are interested in taking bribes will stop doing so because it will be hard for them to keep their illegal money.

This step will help the government find money that has been stolen. People who have money they got illegally are now expected to pay taxes on it and show their PAN when they do anything legal with their money. The government can get a tax return for the money that wasn’t taxed.

The movement will stop the flow of money that is funding illegal activities, which is getting worse because the money isn’t being tracked. By making it illegal to have high-value money, illegal activities like terrorism will be stopped.

The threat of money laundering will also be stopped by the ban on high-value money. No such action is easy to track down, and the people who are involved in money laundering can be found by the income tax office.

Taking this step will stop the flow of fake money. Most of the fake money in circulation is high-value, so stopping the use of 500 and 1000 rupee notes will cut down on the circulation of fake money.

People who opened Jan Dhan bank accounts as part of the Prime Minister’s Jan Dhan Yojana scheme are now interested in how things are going. Indian citizens can now put their extra money into this plan, which can then be used to help the country grow.

People will have to pay income tax because of the plan to get rid of cash. Most people who had been hiding their income are now forced to come forward, report it, and pay tax on it. People who deposit more than Rs 50,000 in the capital are required to give their PAN. Deposits of up to Rs 2.5 lakh will not be checked by the Income-tax office. It will make it easier for the income tax department to find people with large amounts of cash.

The final goal is to get rid of cash in India by making it a digital economy. All financial transactions must go through banks, and people must be responsible for every dollar they hold. It is a big step toward making India a digital country, which is what people want. There are some good things about Demonetisation, but there are also some bad things.

Disadvantages of Demonetisation

People have had a lot of trouble because of the decision to make money worthless. People are running to banks to trade, deposit, or take out notes. The situation is out of control because the news came out so quickly. People are very angry because there is a delay in the flow of new money. It has had a huge effect on business. Because of the cash crisis, the whole market has stopped.

There are a lot of poor regular-wage workers who have lost their jobs because their owners can’t pay their daily payments.

This policy is hard for the government to carry out. It has to pay for the cost of making the new notes of currency. Also, people are noticing that it’s hard to get new bills into circulation. People don’t want to do business with such high-value money, so the 2000 rupees note is a burden. Some people in charge think it will only make people more likely to use illegal money in the future.

Also, many people have dumped the demonetized money notes in secret, which hurts the economy of the country.

Read Other English Essay:- Essay on Delhi A Historical City, Triple Talaq Essay

Conclusion

Since the turn of the last century, governments all over the world have been getting rid of money. Even though the money that was demonetized may have been different, the goals have mostly stayed the same: to get rid of black money, stop illegal activities, and bring money into the mainstream. When making the decision to demonetize, the best interests of the country came first. Even though the decision might have made things hard for most people, it was made with the national interest and economic growth in mind.

FAQ’s on Demonetisation Essay