Introduction to Demonetization in India and Its Status

Introduction to Demonetization in India and Its Status

So, what the demonetization? As per “Investopedia“, a demonetization is an act of removing the legal status of currency as “Legal Tender”. Means old notes or even coins must be retired and replaced with new ones or completely new currency can be introduced like Rs. 2000 note which was not available earlier.

On 8^th November, PM Modi’s announcement was the breaking news across India. Rs.500 and Rs. 1000 notes (currency) are made illegal from a stroke of midnight. One might think, why it’s been done? Indian government’s goal was to remove all counterfeit (fake) currency from the market which is used in tax evasion, corruption and even in funding terrorist activities. These two currency notes are the most used currency in the Indian market, it had 86% share in the market. This was a very big and risky decision and as some aptly said it is a “Masterstroke“. Some even say it is a “Surgical Attack” on black money. In simple words, old Rs 500 and Rs. 1000 notes are worthless now, they are just a piece of paper.

The opposite of demonetization is remonetisation, which means restoring the demonetized currency as legal tender. And a lot of political parties from the opposition are fighting for it.

Impact of demonetization within India and foreign Relations

Demonetization has a big impact on Indian market and citizens like you and me. People flocked the banks to changed their currency and stood in long lines in front of bank and ATMs for hours to draw their money. Surely, we have problems in but we also need to understand the importance of it. Just imagine if it was told a month ago, then all black money launderers could have managed their money in this or that form. That’s why it has to be a sudden and surprise act.

Conclusion

To sum up everything, I would say; demonetization was a really a masterstroke. It will help in fighting against corruption, black money, and tax evasion. I as Indian stand strongly behind this move. Though all good said about this, I think the way it was planned and handled could have been better. Otherwise, I support the demonetization.

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Author & Editor

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