Pros and cons of demonetisation

Dear student,

The pros of demonetisation are:

1. Credit will become easy, interest rates will come down.
2. It will help government to fight corruption, black money, etc.
3. Smuggling and illegal activities will reduce.

The cons of demonetisation are:

1. Real estate sector will be affected badly.
2. Common people who do not know card transactions will suffer,
3. It will impact daily wagers.

Regards

View Full Answer

Pros:-

Massive decline in black money:- This decision is pain in the ass for black money holders having trucks of money undeclared and enjoying withot paying any tax.
Almost End of Fake currency racket intially :- If implemented correctly and effectively then it will result in end of fake currency racket as most of the fake notes are of Rs500 and Rs1000 but later criminals will make fake Rs2000 note.
Obstacle for terrorism:- As said by PM Modi "From across the border, our enemies running racket in India through fake currency”, We all know he was refering to Pak and China so this decision will put obstacle in their path.
Reduce in corruption for few months:- Shameless corrupt tratiors will find other methods but it will take some time.Like in other countries bitcoins,online loopholes are used for corruption money but it will take sometime.
Fair Election:- we all know how much black money is used by political parties atleast for upcoming 5 state election it will be very tough task to use trucks of money in election like EC caught in Tamilnadu.

Cons:-

Inconvenience to people:- burden in exchanging notes to common people.
Loss to comman People :- Many people have fake currency that it unintentional or earned by hard work and they are using it wihout knowing it.Now banks will refuse to take fake money it direct loss for innocent people.
Initial rise in corruption:- imagine this, you have Rs. 1 lacs you go to exchange, cashier said ,then you are screwed, whther it is fake or not.
Loss of Tax Payers Money :- Rs 500 prnting costs Rs 2.5 and Rs.1000 costs Rs 3 , (approx ).Multiply it by number of notes present in India ;now government has to pay this money from taxpayers. (Rs.100 Notes = 23% and Rs.500 notes = 44%and Rs.1000 notes = 24% Notes of 100,500 and1000 Rs. account for 93% of the Total Currency Money.)

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