Demonetization is the act of stripping a currency unit of its status as legal tender. Demonetization is necessary whenever there is a change of national currency. The old unit of currency must be retired and replaced with a new currency unit. This in simple words mean that we will not be able to use the previous currency.
Indian Government took a big step of demonetizing the ₹500 and ₹1000 notes in a single day which means that we will not be able to use these notes from that day only. The government gave time till December to exchange the money.
This Demonetization will have different effects on the Indian Economy and on the Indian people.
Demonetization will surely effect the economy as the money which was previously unaccounted for will come into the system which will help to strengthen the economy.
The Black Money problem will also be resolved as the black money is mainly kept in ₹500 and ₹1000 notes.So, for those people who have black money or undeclared money they will have to throw this money. As from 1 Jan 2017, this money will just be piece of paper.
Moreover this demonetization is an opportunity to educate people about the plastic money which helps to keep a check on the black money.
The problem will only be in the transition state as the whole money will have to be changed or deposited and this will take time and patience.
Moreover Indian Government has imposed a restriction on the amount of money you can exchange or take out from the bank which has some economic benefits. So, the transition will take time and patience, we just need to calm down and let this take place.
So, Please Share your views in the comments. Thank You.
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