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What are the merits of demonetisation?

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What are the merits of demonetisation?

A Comparison Table for Advantages and Disadvantages of Demonetisation

Advantages Disadvantages
Demonetisation can result in a decrease in tax evasion by individuals and ensure the implementation of practical public measures. Every ATM in the country needs to be remodified to allow the exchange of currency.

What was the benefit of demonetisation?

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.

What are the pros and cons of Demonetisation?

What did demonetization achieve?

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On the fourth anniversary of demonetisation, Prime Minister Narendra Modi on Sunday said the move helped in reducing black money, increase tax compliance and formalisation of the economy.

What are the disadvantages of demonetization?

We have a long way to go to become cash less economy especially from point of view of security of digital transactions.

  • Even if a person is ready to make digital transaction,most of the vendors are not ready to accept because of lack of awareness.
  • Rural poor might find it difficult to shift to digital economy (without help) because of illiteracy.

    • What is the reason of demonetization?

    Demonetization can occur for several reasons, from a change in national currency to the retirement of older forms of money. Over time, several countries have implemented currency demonetization measures, albeit with varying degrees of success. Demonetization is an economic process in which a country’s currency unit is no longer legal tender.

    What is the effect of demonitisation?

    The impact of changing the legal tender status of a currency unit has a huge impact on the economic transactions that take place in an economy. Demonetisation can cause unrest in an economy or it can help in stabilizing the economy from existing problems. Demonetisation is usually taken by a country for various reasons.

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    What is the impact of demonetization?

    Effects of Demonetization This policy aims to make the country corruption-free. It helps the government of a country to track the source of black money. This policy also stops the funding of illegal activities like terrorism, human trafficking, money laundering, etc.