DEMONETISATION (some serious talking this time)

Demonetisation, a term which is commonly in use from recent past days.

Lets first understand what the term "Demonetisation" means,

"Demonetisation, it is the act of stripping a currency unit of its status as a legal tender".

Whenever there is a change in National Currency,Demonetisation is necessary. The old unit of the currency must be retired and replaced with a new currency unit. Process of Demonetisation involves either introducing new notes or coins of the same currency or completely replacing the old currency with the new currency.

Indian Currency is not the only currency which went through the process of  Demonetisation, Zimbabwean Dollar and Euro were also demonetised.

Now the question arises why the government decides to demonetise the currency ???

Reasons for demonetising the currency is to

• combat inflation
• corruption 
• eradicate counterfeit currency 
• fight tax invasion 
• eliminate black money gotten from money laundering
• terrorist financing activity

In 2016 only,the Indian government decided to demonetise the 500 and 1,000 rupee notes, the two biggest denomination notes. Historically, previous Indian government also demonetised the bank notes,

First,in January 1946 banknote of denomination 1,000 and 10,000 were withdrawn and new notes of 1,000 , 5,000 and 10,000 were introduced. And Second, in  January 1978 again banknotes of 1,000 , 5,000 and 10,000 were demonetised.

Recently, the demonetisation of 500 and 1,000 banknotes was a policy enacted by the government of India on 8 November 2016, ceasing the usage of all 500 and 1,000 banknotes as a legal tender in India from 9 November 2016. The  announcement was made by Prime Minister Of India Narendra Modi  in an Unscheduled live televised address.

It was an effort to stop counterfeit of current bank notes, allegedly used for funding terrorism as well as to dip down the black money in our country.

It will take sometime to settle down everything. Our nation is heading towards the cashless economy.We need to be calm and patient because"मेरा देश बदल रहा है ".

JASLIN