Demonetization is a government venture of stripping a currency of its status and value as a legal tender. The current form of currency is banned and rendered useless and may or may not be replaced by a new form of currency. Some nations introduce an entirely new form of currency in place of old ones. Demonetization targets multiple problems like illegal activities and their funding sources, terrorism, tax evasion, and counterfeit currency.
Further in this article, you will find Essays on Demonetization in 250, 200, and 150 words.
Essay on Demonetization- 250 words
Demonetization is the act of legally banning an entire form of currency and stripping it of its status and value by a government. The government then may or may not introduce a new form of currency. The 2016 Indian Banknote Demonetization was one such move by the Government of India.
On November 8, 2016, the Indian Prime Minister announced the legal ban on the currency notes of 500 and 1000, making around Rs. 15.44 lakh crores worth of currency illegal. It was aimed as a countermeasure against uncontrolled corruption and the penetration of black money into the economy of the nation.
Demonetization has rather long-term effects on a nation and its economy.
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Positive effects of Demonetization
Demonetization may boost the economy of a nation by removing counterfeit currency and bringing black money into the mainstream.
This move has been successful in curbing and marring the rise of tax evasion through black money. It is a huge blow to all the forgery operations and the illegal activities that are fueled by black money like terrorism, illegal racketeering, money laundering, real estate, etc.
Demonetization had also infused sophistication into the banking system. It results in increased liquidity in banks, which means lower interest rates.
Challenges of Demonetization
Although the motives and objectives behind this move were noble, some of its consequences were not as desirable. There were some challenges in the implementation of the scheme, especially due to internet connectivity issues. However, it brought about a Less-Cash economy in India and coerced the nation toward Digital currencies.
Essay on Demonetization- 200 words
Demonetization refers to the act of stripping a currency of its status by a government as a legal tender. It means that a currency loses its entire face value and becomes illegal to be used in any transaction. One such example is the Indian Banknote Demonetization of 2016. India saw a ban on all the 500 and 1000 currency notes and a wipeout of 86% of its currency overnight. It was a surprise move announced by the Prime Minister of India on November 8, 2016.
A nation’s economy is tremendously affected by such sudden moves. These can be positive as well as negative. The goals of demonetization are all directed toward positive changes in the economy like restraining and curbing the penetration of black money into the economy and bringing the fake currency to the surface. This also reduces crimes and illegal activities that are fueled by black money.
But this scheme may have some negative effects on the nation as well, in case of poor implementation. Demonetization may cause an acute drop in GDP, a fall in the industrial outputs, losses in jobs and small businesses, acute cash shortage, and forgery by bank employees if it is not properly planned and executed.
Essay on Demonetization- 150 words
Demonetization is the act of withdrawal of the current currency as a legal tender. The old currency may or may not be replaced by an entirely new form of currency. It means nullifying the face value of a currency so the possessor of such currency has no other option but to exchange the old currency with the banks and pay their taxes.
November 8, 2016, became a memorable day for India with the Indian Prime Minister announcing the demonetization of 500 and 1000 currency notes overnight. This move came as a sudden blow to all the prevalent illegal activities in the nation and the circulation of fake currency in the economy.
But along with these positive changes, there were demerits of this move as well. There was an acute shortage of cash in the country. However, a Less-Cash economy was one of the consequences which resulted in the digitalization of the nation.
In this article we discussed Essay on Demonetization with 100 words, 200 words and 250 words for class 7,8,9,10,11,12.
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