Effect of Demonetization on India's Economy
Demonetization impact is felt by every Indian citizen. Demonetization affects the economy through the liquidity side. Its effect will be a telling one because nearly 86% of currency value in circulation was withdrawn without replacing bulk of it. some points are given below
- Percentage of transactions done in real estate business & jewellery business via black money will reduce
- Less import of Gold
- More transactions will be done through RTGS/NEFT & Cheques
- More transactions via swiping machines at shops
- Number of online transactions will greatly rise
- Transactions through Payment Applications like Paytm, Mobikwik, Freecharge will increase.
- Many currency hoarders will be identified
- Hawala business will reduce
- Land prices will reduce
- More fear of IT department will be there among corrupts
- More involvement of banks in transactions due to lesser money in the market.
- Merger of banks may take place
- Increase in Banking Infrastructure
- More jobs in banking and financial sector
- Prices of various commodities will reduce
- People will have fear of keeping large amount of higher currency notes illegally
- The fake currency will be controlled due to enhanced security features in newly circulated Rs.500 & Rs.2000 notes
- Money used in terrorism and extortion will reduce
- Reduction in black money used in elections and campaigning
- More use of ATMs
- Impact on bank deposits and interest rate
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