SSC-CGL (TIER-III) - Indian economy after demonetization
Category : SSC
INDIAN ECONOMY AFTER DEMONETIZATION
Key Points:
Introduction
Implications
Way ahead
THE ESSAY BEGINS…
The leap of humanity from barer system to currency, with the latest being be-coms, has simplified the economic activities of humans Currencies at present represent stability of a nation and not just simplicity. Government of India on 8th November 2016 demonetized its currency by cancelling the legal tender of higher denomination notes of Rs 1000 and Rs 500.
This drastic measure was undertaken, keeping in mind the short-term difficulties and the long-term benefits for the country.
The menace of growing counterfeit currency in the economy, multiple eases of tax evasion on large scale, accumulation of black money, terror financing, contraband circulation can be curbed effectively through this initiative.
Higher dependence on cash in India resulted in long queues at banks, post offices and ATMs due to the shortage of currency otter demonetization. Fund crunch in firms, decreased trade and commerce activities and inconvenience to general public are some of the implications of this initiative.
In long run, demonetization can be a 'blessing in disguise' for India, reducing the over- dependency on cash, thereby leading to a transparent cashless economy.
Curbing the menace of black money and counterfeit currency will result in the end of parallel economy leading to higher growth in real terms.
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