Demonetization Decision: A Review of Unprecedented Orderliness of 8/11

B R Shyam,N K Ramachandra Gowda

doi:10.21095/ajmr/2017/v10/i1/115195

B R Shyam, N K Ramachandra Gowda

Open Access

https://doi.org/10.21095/ajmr/2017/v10/i1/115195

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Abstract

Modi's Demonetization is a short term pain for long term gain, the 8/11 master stroke or surgical strike on black money is a change in the Indian Economy. Bigger/higher denomination notes are the root cause for black money in the country and are predominantly used either by tax evaders or worse by financers or illegal operations such as drug trading and terrorist activities. Though there may be initial discomfort and inconvenience this is not the end, this is not a full stop, but a war against black money: agony, ecstasy and the queues. It is an innovative thought and the Prime Minister seems eager to ensure that it gets implemented the right way and this decision will change the way the next generation sees the system, this change is going to be historical (His Story). Thus, this paper brings a review of demonetization decision and highlight that this decision will have a positive long-term impact on the economy.

Highlights

Demonetization is the act of stripping a currency unit of its status as legal tender
The old unit of currency must be retired and replaced with a new currency unit.The opposite of demonetization is remonetization where a form of payment is restored as legal tender
Rs 17,54,000 crore worth of notes are in circulation according to the RBI’s database of the Indian economy

Summary

INTRODUCTION

Demonetization is the act of stripping a currency unit of its status as legal tender. The old unit of currency must be retired and replaced with a new currency unit.The opposite of demonetization is remonetization where a form of payment is restored as legal tender. Rs 17,54,000 crore worth of notes are in circulation according to the RBI’s database of the Indian economy. Of this Rs 500 notes constituted almost 45% of the currency in circulation while 39% of the notes were of the Rs 1,000 denomination. In terms of volume, Rs 10 and Rs 100 notes constituted 53% of the notes in circulation This measure would mean that from midnight, almost Rs 6,32,600 crore in circulation in the form of Rs 1,000 notes would be illegal tender. Rs 2,000 notes would be introduced, which according to the government would be limited in circulation

Aim of the Move

Findings

Conclusion