Demonetization
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 On 8 November 2016, Prime Minister Narendra Modi announced the "demonetization" of Rs. 500 and Rs. 1,000 notes with effect from the next day. The first claim is that demonetization would plug ** financing. The second claim is that demonetization would help unearth money." The third claim is that the unearthed money would expand the fiscal space of the government. When unaccounted cash is not returned to the banking system, the Reserve Bank of India (RBI) can use the savings to pay the government e dividend. The fourth claim is that demonetization would help-reduce interest rates in the banking system. The fifth claim is that demonetization would help formalise India' informs economy reduce the extent of transactions in cash and help create a less-cash economy" Demonetization as a cleaning exercise may produce good things economy. The immeasurable benefits of having more transparency and reduced volume of **** money activities can be expected as long term benefits.
