The demonetization is a policy to take back the old banknotes and replaced with new one. In India, the demonetization was recently took place on November 8, 2016 by the Government of India under the leadership of Shri Narendra Modi, the Prime Minister of India.
The Prime Minister of India Narendra Modi announced about the demonetization without any scheduled television speech at 20:15 (IST) on November 8, 2016. In his speech, Prime Minister Narendra Modi declared that all banknotes of Rs. 500 and Rs. 1000 would be invalid after midnight of that day.
After the announcement, the BSE SENSEX and NIFTY 50 stock indices crashed for continuously next two days where investors lost millions of rupees. However, the Government of India argued that the step will be beneficial in long-term.
The demonetization in India was also happened in the past. In January 1978, the Government of India demonetized Rs. 1000, Rs. 5000, and Rs. 10,000 rupee banknotes to counter black money in India. However, this step was failed to counter black money in India. The corruption is still rampant in all parts of the country.
Read Also: An Essay on Corruption in India
In 2016 demonetization, the Income Tax officials raided many branches of Axis Bank, one of the largest private banks in India and found many officers involvement in money laundering acts.
Many companies, and firms used method of backdated accounting in precious products, such as jewelry, iPhone, iPad, and other high-value products.
The Government of India allowed to pay government taxes, railway bookings, pay hospital bills, and many other places could accept the old banknotes of Rs. 500 and Rs. 1000 for a few days to reduce the issues.
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Article Title: An Essay on Demonetization in India for Students, Kids and Children
Article first published on December 24, 2016. Original.