etisation

In November 2016, the Government of India took the monumental decision of demonetising the existing Rs. 500 and Rs.1000 notes. The decision was seen as a huge leap towards curbing the menace of corruption and black money in the economy. Demonicetisation has provided various positive benefits for the Indian economy in its fight against corruption and black money.

First, demonetisation has resulted in a reduction of corruption. High-value currency notes were the conduit for corruption, as it allowed individuals to transact and store large sums of money without having to pay taxes. The demonetisation of these currency notes has eliminated this source of corruption. As a result, individuals can no longer engage in the illegal transactions as all money is now tracked and accounted for. This has also resulted in more efficient tax collections, as individuals are now obliged to pay taxes on all transactions.

Second, demonetisation has led to an increase in the level of financial inclusion. By making it mandatory for all transactions to be conducted through banks and digital wallets, the Government has ensured that more individuals are brought into the financial system. This has resulted in more individuals having access to credit, insurance, and other banking services, which in turn, has helped in creating a level playing field and enhanced economic growth.

Third, demonetisation has led to an increase in the use of digital payments. This has resulted in cost savings for both merchants and customers, as cash is no longer the only option for performing a transaction. It has also brought in more convenience as customers no longer have to worry about carrying large sums of cash. This has also resulted in more secure transactions, as all payments are now traceable and tracked.

Finally, demonetisation has resulted in an increase in the tax base. More individuals, who were earlier paying no taxes, are now under the purview of the taxation system. This has resulted in more individuals contributing towards the country’s development, as they are now paying their dues.

Overall, the positives of demonetisation far outweigh the immediate pains it caused. Demonetisation has made India a much more transparent and accountable society, which is necessary in this age of technological advancements and globalisation. In the long run, India can become a global superpower by implementing these sorts of reforms.