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Nowadays we are hearing a lot about demonetisation. India and Sweden are the first to promote demonetisation.  As we all know currency is withdrawn while on the implementation of demonetisation.
But my question is other than that what is the real advantages and aim of demonetisation? I need an expert answer.
asked Apr 29, 2017 in Business+Finance by Narendra Singh Level 3 (2,420 points) | 34 views

2 Answers

+2 votes
Best answer
Demonetisation is a process by which a country discontinue it's physical currency partially or fully to promote digital ways of transactions.
People are forced to make transactions online by digital payment portals or mobile apps while demonetisation is introduced. To achieve this target a nation should have a strong internet backbone.
Yes there are some advantages of demonetisation. The ease of transactions without carrying money in your pocket is an advantage. Anti social activities using money can be controlled very effectively. Bribing will also comes to an end.
But a government may be looking for increase their income through taxes as all transactions are recorded through bank statements and tax IDs.
There are many complex situations when trying to impose demonetisation in countries like India, where internet is not available in rural areas of northern states. Moreover a cheap and reliable internet service should be there to make it possible.
Even though there are advantages demonetisation became a failure in India as the implementation was such kind of a stupid action by the government. Moreover government should bring down the tax rates in order to avoid burden to the agricultural sector and flourishing small scale sectors.
Every laws should be for the sake of the citizens in that country.
answered May 8, 2017 by Arshad Malik Level 2 (520 points)
selected Jun 28, 2017 by Narendra Singh
One cannot say that its a failure in India. Its need more time to move from physical currency to digital. Its not easy to move fast, as far as India like big country with huge population. My opinion is its a good step to the future.
nice  answer
0 votes

Demonetisation means that the government has to opt for foreign sources to secure funding and in the process increase the national debt. It can reduce inflation, improve the economy, and result in financial behavior change among citizens.

answered Aug 26, 2017 by Myrobostation Level 1 (320 points)