On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series. It also announced the issuance of new ₹500 and ₹2000 banknotes in exchange for the demonetised banknotes.

2. A Look Back to 1978 ...

4. Breaking Down 'Demonetision'

5. • On 8th November 2016 , PM Narendra Modi announced the
demonetisation in an unscheduled live televised address at 08:00
p.m.
• PM Modi declared that use of all ₹500 and ₹1000 banknotes would
be invalid past midnight and announced the issuance of new ₹500
and ₹2000 banknotes in exchange for the new bank notes.

6. Cash Withdrawals from bank accounts were restricted
to ₹10,000 per day and ₹20,000 per week per account
from 10th to 13th November !
This Limit was increased to ₹24,000 per week from 14
November 2016
A Daily Limit on withdrawals from ATMs was also
imposed varying from ₹2,000 per day till 14th November
, and ₹2,500 per day till 31st December.
The limit was increased to ₹4,500 per day from January 1 ,
and again to ₹10,000 from January 16, 2017.

7.  Boost Deposit Base and Savings.
 Improved Monetary transmission and reduce lending
rates
 The Demonetization drive of higher denominated notes
gave a pus to cash depoisits in Jan-Dhan Accounts.
 Benefits From Higher Income Tax Collections
 Rise in GDP Growth Pottential.
 Support Government Finance.

8.  Demonetisation Played a Major role in
implementing Digital Payments .
 Due to daily and weekly usage restrictions ,
people started using their cards at swipe
machines and also gave a boost to E-Wallets as
the primary source of payments.

9.  Banks were extremely crowded by the people due to which
peole need to wait for hours in queues.
 As Demand for Notes > Supply their was a shortage of
money in Banks and ATMs for common people
 Stock Market Faced a huge loss. Sensex fall of 1600 points
after its effect on Economy.
 People were forced to use Card instead of Cash
transaction which in turn incured charges .
 Difficulties were faced by the family members
having weddings and other emergencies.
 Due to shortage of money in market a short term
cost push inflation occured.

10.  Transaction Charges on Cards and Online
Purchases were Removed.
 All Hospitals , Medical Shops and Petrol Pumps
were allowed to take the old currencies.
 Travel Expenses Such as Reservation in Railways
and Aeroplanes were done with the Old
Currencies.
 Each Day Modi Government Came with a new
Regulation to Overcome the Problems.
 PM Modi Named all these as 'Kadvi Dawa' which
tastes sour at once but has a good long term
impact.

11.  Effects on Parallel Economy.
 Effects on Money Supply.
 Effects on Demands.
 Effects on Prices
 Effects on GDP
 The GDP formation impacted by this measure ,
with reduction in consumption demand
 Price level lowered due to moderation from
demand side.
 The Demand of luxury items and the overall
demand also got affected.

12.  The advantages are much dominating and it will
in long term impact of our country comfortably
outweighing the diadvantages.
 It has made a massive change in economy with
increase in Digital Payments
 People have shifted to Online Transactions which
in turn has boosted up the tracking of all the
purchases made by a person which in turn helps
in eradicading Black Money.
 None of the Expenses done from bank are
untracked and hence all transactions are noted
by the Department so that it can avoid the Tax
Stealing.