What is demonetization advantages and disadvantages?

A major advantage of demonetisation is that it helped the government track black money. Large sums of black money was kept hidden by tax evaders. Demonetisation helped government uncover huge amount of unaccounted cash. Demonetisation is acting as an effective countermeasure against such activities.

What is the benefits of demonetisation in India?

While demonetisation imposed short-term costs, there have been important benefits via the above-mentioned increase in direct tax collections as a proportion of GDP, and the sharp, persistent rise in digital payments, said KV Subramanian, chief economic adviser to the government, in this Livemint article.

How does demonetisation affect Indian economy?

Demonetisation lowered the growth rate of economic activity by at least 2 percentage points in the quarter of demonetization, said a working paper entitled ‘Cash and the Economy: Evidence from India’s Demonetisation. ‘

How did India benefit from demonetization?

And, if demonetization was able to broaden the nation’s tax base and increase government revenues, it held the potential to reduce Indian tax rates, which could increase domestic investments and spur meaningful growth.

Is demonetisation a failure or success?

The data on Income tax returns filed also confirms the success of the demonetisation of the scheme. According to I-T Department data, number of income tax returns filed grew 6.5 per cent in FY 2015 to 40.4 million. It surged 14.5 per cent in FY 2016 and then jumped 20.5 per cent in FY 2017, the year of demonetisation.

How did demonetization affect India?

Demonetisation lowered the growth rate of economic activity by at least 2 percentage points in the quarter of demonetization, said a working paper entitled ‘Cash and the Economy: Evidence from India’s Demonetisation.

Are there any benefits of demonetisation in India?

The possible benefits are as follows Increased Savings – As a result of demonetization, people will tend to deposit their cash in the bank rather than at… Lower lending rates – With currency demonetization, money moves from people to banks and financial institutions. Thus,… Better economy – As

What are the impacts of Demonetisation on Indian economy?

Almost 33\% of Indians think that the biggest impact of demonetization was Economic Slowdown . Many people believe that because of demonetization many daily wages and unorganized sector workers lost almost all of their earnings. At least five million factory workers lost their jobs between 2016 to 2018.

How has demonetization affected the Indian economy?

On Gross Domestic Product (GDP): The Indian economy is a cash-driven economy and demonetisation has largely affected its growth . The GDP growth rate of 8.01\% in 2015-2016 fell to 7.11\% in 2016-2017 after demonetisation. This was largely due to less availability of cash in cash-intensive industries like manufacturing and construction.

What is the negative impact of demonetisation?

The negative impact of demonetisation was felt across the all segments of economy , especially agriculture and industry. The worst impacted were segments that relied on high-volume cash transaction, such as organized and unorganized retail. The impact was felt at both the firm level as well as at the consumer level.