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    Demonetization

    Uploaded by

    vamsidhara Reddy
    The document discusses India's demonetization in 2016. It provides background on previous demonetizations in 1946 and 1978. It explains that in 2016, PM Modi declared that Rs. 500 and Rs. 1000 banknotes would no longer be legal tender, accounting for 86% of currency in circulation. The purpose was to curb black money, fake currency, and use of funds for illegal activities. The consequences included increased tax income, reduced interest rates, increased liquidity and reduced money supply, effects on demand, price, GDP, and banks. Various sectors were positively or negatively impacted in the short term, and transitional issues needed to be managed.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Demonetization

    Uploaded by

    vamsidhara Reddy
    93 views7 pages
    The document discusses India's demonetization in 2016. It provides background on previous demonetizations in 1946 and 1978. It explains that in 2016, PM Modi declared that Rs. 500 and Rs. 1000 banknotes would no longer be legal tender, accounting for 86% of currency in circulation. The purpose was to curb black money, fake currency, and use of funds for illegal activities. The consequences included increased tax income, reduced interest rates, increased liquidity and reduced money supply, effects on demand, price, GDP, and banks. Various sectors were positively or negatively impacted in the short term, and transitional issues needed to be managed.

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    Demonetization PPT

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    Demonetization PPT

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    The document discusses India's demonetization in 2016. It provides background on previous demonetizations in 1946 and 1978. It explains that in 2016, PM Modi declared that Rs. 500 and Rs. 1000 banknotes would no longer be legal tender, accounting for 86% of currency in circulation. The purpose was to curb black money, fake currency, and use of funds for illegal activities. The consequences included increased tax income, reduced interest rates, increased liquidity and reduced money supply, effects on demand, price, GDP, and banks. Various sectors were positively or negatively impacted in the short term, and transitional issues needed to be managed.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    93 views7 pages

    Demonetization

    Uploaded by

    vamsidhara Reddy
    The document discusses India's demonetization in 2016. It provides background on previous demonetizations in 1946 and 1978. It explains that in 2016, PM Modi declared that Rs. 500 and Rs. 1000 banknotes would no longer be legal tender, accounting for 86% of currency in circulation. The purpose was to curb black money, fake currency, and use of funds for illegal activities. The consequences included increased tax income, reduced interest rates, increased liquidity and reduced money supply, effects on demand, price, GDP, and banks. Various sectors were positively or negatively impacted in the short term, and transitional issues needed to be managed.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7

    DEMONETIZATION

    DE Background Of Demonetization
    Meaning:-
    Ending something that is no longer the legal tender of a country.

    Background:-
     India has carried out demonetization exercises twice before, in 1946 and 1978.
     In Jan-1978, currency worth Rs. 1.46 bn (1.7% of total notes in circulation) was
    demonetized. Of this, Rs. 1.0 bn (or 68%) was tendered back. In 1978 the value of
    demonetization was very small (only 0.1% of GDP).
     On November 8-2016 at 8:15 PM, Hon’ble PM declared that all INR 500 & INR 1000
    banknotes ceased to be legal tender money in India w.e.f November 9-2016.
    However, the 2016 demonetization efforts covers 86% of the total currency in
    circulation (11% of GDP).
    DE Purpose Of Demonetization

     Curb financing of terrorism through the proceeds of Fake Indian Currency Notes
    (FICN)
     For eliminating Black Money which casts a long shadow of parallel economy on
    our real economy
     Curb the use of FICN funds for subversive activities such as espionage, smuggling
    of arms, drugs and other contrabands into India
    DE Consequences Of Demonetization

    Following are the probable consequences of demonetization :


    1. Increase in Tax Income and reduction in tax rates
    2. Reduction in Interest Rates
    3. Increase in Liquidity of Funds (Cash) and Reduction in Money Supply
    4. Effect on Demand & Price
    i. Consumer Goods
    ii. Real estate and Property
    5. Effect on GDP
    6. Effect on Banks
    7. Effect on Online Transactions & Alternatives modes of Payment
    DE Sector Wise Impact of Demonetization

    Due to demonetization there are mixed impacts on various sectors.


    Major sectors benefited from demonetization :
    I. Payment gateways
    II. Cards
    III. Mobile wallets
    IV. Online retail
    V. Payment banks
    Negative impact on following Major sectors in short term :
    I. Real Estate
    II. Luxury Goods
    III. Retail Goods (Agriculture Sector)
    IV. Consumer Goods
    DE Transitional Issues

    Following are the major transition issues that needs to be managed for this
    transition to be effective :-
    1. Infrastructure Issues
    2. Consumer behaviour issues
    3. Accessibility in Language
    4. Transition Issues for Banks (Mainly w.r.t Deposit & Withdrawal Policies)
    5. Income Tax Related Issues
    DE

    Thank You

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