Disadvantages Of Demonetization

DEMONETIZATION

Demonetization is the act of stripping out a currency unit as legal tender. It happens when change of national currency takes place. The form of money in circulation is pulled out and discarded, which might or often are replaced with new notes and coins. Many a times, a country replaces the old currency with the new ones completely. There can be several reasons why a government wants to enforce demonetization. Some of them are to discourage a cash-dependent economy, to counter inflation, to counter corruption and crime (terrorism, tax evasion), to encourage trade, etc.

There are several advantages linked with the process of demonetization.

The biggest and impactful advantage of demonetization is

because black money is utilized majorly for illegal and destructive activities like gambling, money laundering , terrorism funding, and increasing the price of assets like gold, real estates and due to implementation of demonetization , such activities will step down for a while . The Real estate industry is completely corrupted and by this decision the industry will have more transparency. It will consume many years for such people to generate the same amount again and therefore in a way it puts an end to people indulging in illegal activities to generate black money. Due to people revealing their income by depositing money in their bank accounts , government gets a high amount of tax revenue which can be utilized by the government towards to facilitate services for society by providing educational institutions ,roads hospitals, good infrastructure, and new schemes for needy and poor sections of society. Loans will become easier to take and interest rates will come down. As banks have money so more loans will be given out which will increase the supply of money in the market and it will enforce

because of non availibilty of Cash in the market industries like gold, infrastructure ,real estate, etc. will be affected, which might lead to slowdown of the growth of economy of a country. the transaction halts due to insufficient cash flow in the market also there is no sales or any monetary transaction till everyone get enough cash to do so. people don’t have adequate amount of money hence they don’t buy any land or plot . the Real Estate industry runs low which will affect the economy of the nation, which leads to inflation and gradual fall in GDP.The Corruption takes place At Different Level.the Government takes a courageous and bold step of demonetization to eliminate inflation, corruption, poverty and to elevate the GDP, But there is corruption at another level because every person starts doing money laundering. Demonetization may cause inconvenience for the first initial days for people have to take numerous rounds to the banks to deposit amount, exchange notes or withdraw the same. The situation turns chaotic if the circulation of new currency gets delayed because of some reasons. Individuals who have upcoming weddings are the ones to make alternative arrangements to make payments .however, the government has given higher withdrawal limits in such