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Importance

Demonetization of Rs. 500 and Rs. 1000 currency notes is expected to curb financial corruption, fight fake currency, expose tax evaders, improve government revenues, and move India toward a cashless economy. Financial corruption destabilizes a country economically and politically. Terrorists had used high denomination notes to undermine India. Those with undisclosed income will have to pay penalties when depositing old notes. The policy aims to formalize transactions and broaden the tax base to benefit honest taxpayers.

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Rakesh Jangid
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29 views

Importance

Demonetization of Rs. 500 and Rs. 1000 currency notes is expected to curb financial corruption, fight fake currency, expose tax evaders, improve government revenues, and move India toward a cashless economy. Financial corruption destabilizes a country economically and politically. Terrorists had used high denomination notes to undermine India. Those with undisclosed income will have to pay penalties when depositing old notes. The policy aims to formalize transactions and broaden the tax base to benefit honest taxpayers.

Uploaded by

Rakesh Jangid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Importance

An attempt to put end to financial corruption


Financial corruption shatters down the economic, social as well as the political stability of a country.
As per reports, the financial corruption major involved the currency notes of bigger denominations.
Hence, the outcome of demonetization of Rs 500 and 1000 currency notes is expected to put an end
to such practices.

An effective way to fight the peril of fake currency notes


In the last few years, terrorists from the neighboring countries had been consistent to wreck the
financial stability of India by introducing fake currency notes to the market. These evil forces mainly
used to forge the currency notes of Rs. 500 and Rs. 1000 and the introduction of the new series
currency notes have put an end to such practices

Demonetization will expose those entities that have non-complied with the prevailing tax
rules
It is an open secret that every year the Government has to lose revenues in several thousand cores
for a few dishonest entities, deliberately refraining from tax payment. The adverse effect of this
activity falls on the honest taxpayers who are the majority. As the outcome of the demonetization,
entities that had created a fund out of such black money will have to deposit or exchange the
currency notes from the bank. As per the prevailing practices, a bank account holder compulsorily
needs to provide the bank their AADHAR card number.

The government will improve the figure of the collected revenues


As per the clause of the demonetization, there is provision to impose up to 200% penalty from such
entities that would try to legalize their fund of black money. This will bring a significant amount of
money in the hands of the government.

A move towards a cashless economic framework


Cash transactions were another tool for unscrupulous parties to refrain from paying the necessary
taxes and duties. The call for demonetization will make the Indian economy to embrace the plastic
money to a higher extent. This will bring more transactions in the market under the supervision of the
government.

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