The demonetisation completes its 5th anniversary and social media is flooded with memes.
In his address to the nation on November 8, 2016, at 8 p.m., Prime Minister Narendra Modi unexpectedly took out the high denomination currency notes of 500 and 1000 rupees and declared them not to be legal tender (legal currency).
Demonetisation is an abbreviation for demonetization. Demonetisation or demonetization refers to the government of any country prohibiting or prohibiting the use of high denomination notes, rendering them useless. Nothing can be bought or sold from them, and nothing can be sold to them.
In general, new currencies are introduced in place of the existing old currency during this process. This is sometimes done in order to combat black money and counterfeit currency. But you’re probably wondering if the government has the authority to withdraw the notes. In other words, demonetisation is the process by which new notes and coins are replaced by old notes and coins.
Why is demonetisation required?
This is a question that must have crossed almost everyone’s mind: why does any country require demonetisation or demonetisation?
The need for demonetisation or demonetisation would have arisen in any country when the hoarding of black money and the business of counterfeit notes began to increase. In such a case, people begin to engage in more cash transactions to avoid paying taxes, which typically involve large notes. Demonetisation has the potential to reduce corruption, black money, counterfeit currency, inflation, and terrorist activity.
Economists believe that changes to the notes’ security should be made every five years, despite the fact that the notes’ abolition is a significant change. Prior to demonetisation in 2016, the number of counterfeit notes had risen to the point where even banks and ATMs were receiving reports of counterfeit notes. Following an investigation, it was discovered that the fake notes were identical to the originals.
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Authority to withdraw notes
On the recommendation of the Reserve Bank of India’s Central Board, the Central Government may, by notification in the Gazette of India, cancel any series and denomination notes as legal tender under Section 26(2) of the Reserve Bank of India Act, 1934. which will go into effect on the date specified in the notification
When was demonetisation implemented in India?
Even before 2016, the country had experienced two rounds of demonetisation. In 1946, the British government implemented demonetisation for the first time. Following this, demonetisation was implemented in 1978.
For the first time, in 1946, the decision was made to discontinue 500, 1000, and 10,000 notes.
Also in the 1970s, the Wanchoo Committee to investigate direct taxes proposed demonetisation, but the suggestion became public, preventing demonetisation from taking place.
Morarji Desai’s Janata Party government passed legislation banning 1000, 5000, and 10,000 rupee notes in January 1978. However, the then-Reserve Bank of India Governor, IG Patel, was opposed to the demonetisation.
Manmohan Singh’s Congress government in India demonetized 500-rupee notes in 2005.
The Modi government also decided to demonetize 500 and 1000 rupee notes in 2016. In the Indian economy, these two notes circulated at a rate of about 86 percent. These were the most commonly used notes in the market.
What is the difference between 1946, 1978, and 2016?
High denomination notes (1000, 5000, and 10,000 rupees) were withdrawn through ordinances in 1946 and 1978, respectively, while notes of 500 and 1000 rupees were withdrawn through notifications in 2016.
Pre-deposit declaration was not required in the 2016 notification, whereas it was required in 1978.
While the 1978 ordinance made the exchange of demonetised notes illegal and punishable, the 2016 verdict was clear. However, holding more than a limited number of demonetised notes was later made a criminal offense.
Remember, tomorrow is the 5th Anniversary of the greatest deliberate act of an economic policy disaster in which the Government – yes the Leader of the Government himself – did the equivalent of shooting the nation in both feet. 8 Nov 2016. #Demonetisation pic.twitter.com/TJyIcpi80X— JayEnAar (@GorwayGlobal) November 7, 2021
#AapChronologySamajhiye— 🇮🇳 Vinay VS 🙈🙉🙊 (@VinayShindeBlr) November 7, 2021
1.₹24000 crore pa interest earned Black money since Nov2016
2. 30000HNI's n Bank Defaulters left India with ₹20lakh crore Loan Default
3.Destroyed MSME&Informal sector
4.₹2lakh crore Corporate Tax hole#Demonetisation #OrganisedLootLegalisedPlunder https://t.co/XIAZVDc5ax pic.twitter.com/hUV2Hf5kKA
"Rs 2000 note with a chip". Archive image from 2016.— Advaid അദ്വൈത് (@Advaidism) November 8, 2021
5 years of #Demonetisation pic.twitter.com/3HOK4AOJ2q
Anniversary of #Demonetisation— ଅବୁଝା ପୁଅ (@AbujhaPua) November 8, 2021
How Modiji won the game ! 😢😁 pic.twitter.com/UUPLCeZM8k