Check sibling questions

Demonetisation means to withdraw existing currency from use.

Example

In November 2016, the Government of India demonetised existing currency notes of Rs500 and Rs1000.

These were no longer legal tender i.e no longer a medium of exchange

New currency notes in the denomination of Rs500 and Rs2000 were introduced.

Public was adviced to deposit all old currency notes in their bank accounts till 31st December 2016.

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Objectives of Demonetisation

1. The main objective was to curb black money.

2. To reduce tax evasion

3. To bring back black money into the banking system'

4. To stop circulation of fake currency

5. To curb terrorism

6. To Tackle problem of corruption

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Effect on Public

The move received both criticism and appreciation

People had to stand in long queues outside ATMs and Banks for cash deposit and withdrawal

The shortage of currency adversely affected the economic growth of the country.

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NCERT Questions

No questions in this part

Other Books

Question 1

In the following questions, select the correct answers:

Which of the following is true regarding Demonetisation?

a. The move took place in November 2020

b. Demonetisation's main motive was to curb black money

c. New currency in the denomination of Rs1000 and Rs2000 were introduced

d Existing currency notes of Rs500 and Rs1000 were demonetised.

View Answer

Oswaal Questions

Question 1

Read the below case and answer the questions that follow:

In a 40-minute long speech Prime Minister Narendra Modi announced the demonetisation of existing notes of Rs 500 and Rs 1,000 during a televised address on Tuesday evening.

Modi announced that the notes of Rs 500 and Rs 1,000 "will not be legal tender from midnight tonight" and these will be "just worthless pieces of paper".

PM also urged people to 'join this mahayojna against the ills of corruption. - "What is demonetisation and why was it done?" - The Economic Times, Nov 09, 2016

Question 1(i)

Under whose purview does the issue of new currency fall in?

a. Reserve Bank of India

b. Central Government of India

c. State Government

d. All of the above

View Answer

Question 1(ii)

Which two currency denominations were demonetised?

a. Rs 100 and Rs 500

b. Rs 500 and Rs 2,000

c. Rs 1,000 and Rs 2,000

d. Rs 500 and Rs 1,000

View Answer

Question 1(iii)

______________ is issued by the government of India.

a. Coins

b. Rs500 note

c. Rs1000 note

d. All of these

View Answer

Question 1(iv)

Rs1 currency note is issued by ______________.

a. Finance Ministry

b. RBI

c. NITI Aayog

d. None of the above

View Answer

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Transcript

What is Demonetisation It means Stripping a Currency of its Status as Legal Tender (Withdrawing Existing Currencies from use) On 8 Nov 2016, PM Modi announced that from midnight of tonight, the notes of Rs 500 and Rs 1,000 "will not be legal tender from midnight tonight" and these will be "just worthless pieces of paper". These were to be deposited in Banks till Dec 30 2016 What were the Reasons for Demonetisation It was due to following problems faced by Indian Economy India was Cash Economy (Majority of transaction in cash which has no record) Corruption and Black Money (Bribe collected in Cash kept in lockers) Tax Evasion People did not pay tax on Cash transaction Fake Currency Printed Used for Terrorist and Illegal Activities Benefits/Objectives of Demonetisation Before Demonetisation After Demonetisation India was Cash Economy (Majority of transaction in cash which has no record) India shifted to Digital Economy (People started making online transactions like UPI, Paytm) Tax Evasion People did not pay tax on Cash transaction Tax Compliance Since money now deposited banks Govt will come to know about it and charge tax Benefits/Objectives of Demonetisation Before Demonetisation After Demonetisation Corruption and Black Money (Bribe collected in Cash , kept in lockers) India's Crackdown on Black Economy Money collected through corruption had now to be deposited in banks Fake Currency Printed Used for Terrorist Activities Prevent Fake currency and Terrorism Fake currency will be identified while depositing in banks, Terrorism will be Curbed Criticism Of Demonetisation Long Queues Small Business New 500 and 2000 notes Harassment to Ordinary Public Ordinary Public had to stand in long lines to exchange their notes Many People lost their lives Affected Small Business and Farmers These always did cash transactions There business came to a halt due to demonetization Black Money Not Removed New Notes of 500 and 2000 introduced These now used for Black money and corruption Demonetisation History In India Rs 1000 and 10000 Bank Notes Withdrawn by British India Govt Rs 1000,5000 and 10000 Bank Notes Reintroduced IN 1954 These were again withdrawn in 1978 by Morarji Desai Govt Rs 5000 and 1000 Bank Notes Withdrawn By Modi Govt

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