This presentation discusses the impact of India's 2016 demonetization on the agricultural sector. Demonetization involves removing a currency unit's legal tender status and replacing it with a new currency. India demonetized high-value bills to curb black money, corruption, and counterfeiting. Agriculture is a major part of India's economy and relies heavily on cash transactions. Demonetization disrupted agricultural growth and sales as farmers faced cash shortages. It led to produce being sold below cost and delays in winter crop planting. While demonetization recovered large sums of unaccounted money, it may not fully address the root causes of black money flows unless new monitoring mechanisms are introduced.

1. Gideon Presentation
By
Okeke Chizoba Gideon
DEMONETIZATIONAND ITS EFFECT
ON
THE AGRICULTURAL SECTOR
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2.  Demonetization is the act of stripping a currency unit of its
status as legal tender. It is the process of ceasing to produce
and circulate particular forms of currency.
 This is necessary whenever there is a change of national
currency. The old unit of currency is retired and replaced with
a new currency unit.
What is Demonetization?
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3. Why Demonetization.
 The Financial Action Task Force, a global body that looks at
the criminal use of the international financial system notes that
high-value bills are used in money laundering schemes,
racketeering, and drug and people trafficking.
 Unearth black money from the economy.
 Stall the circulation of counterfeit currency.
 Remove the election funding for polarization
 Control the inflation and price rise.
 Fight corruption and money laundering.
 Curb the funding for anti-social elements like smuggling,
terrorism, espionage etc.
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4. Percentageshare of currencies.
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5. India Agricultural Sector at a Glance
• Agriculture is the keystone of the Indian economy.
• Agricultural labourers account for 58.4 percent of
workforce of India.
• Agricultural growth in India contracted 0.2% in 2014-
15 and grew no more than 1.2% in 2015-16, largely
because of back-to-back droughts.
• The commercial transactions in this sector
necessitate cash transactions on a more frequent
basis .
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6. Agriculture Growth.
• GDP From Agriculture in India decreased to 3095.38 IND
Billion in the third quarter of 2016 from 3743.90 IND
Billion in the second quarter of 2016.
• GDP From Agriculture in India averaged 3899.02 IND
Billion from 2011 until 2016, reaching an all time high of
5217.45 IND Billion in the fourth quarter of 2013 and a
record low of 2715.05 IND Billion in the third quarter of
2011.
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8. Impactof Demonetization on agriculture
• Agriculture was expected to grow at 4% this year
according to October 2016 CRISIL report but
demonetization has disrupted this.
• This informal financial sector, which could account for a
fourth of bank lending or 26% of GDP, gives as high as
71% of all rural lending.
• Sale, transport, marketing and distribution of ready
produce to wholesale centers or distributors, is
dominantly cash-dependent.
• Farmers have been unloading produce below cost,
because no one has the money to purchase , and the
winter crop could not be sown in time, due to lack of
cash for seeds.
• Sales fall, increased wastage of perishables, lower
revenues
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9. Impact of Demonetization
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10. Huge amount of money have been recovered by
I.T department as attempt was made to make
them white money.
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11. Any impact on the black economy?
• Black money hoarders will definitely lose out, eventually
boosting the formal economy in the long run.
• Despite having many positives such as rising tax to GDP,
higher GDP growth, lower inflation, higher financial
savings, this demonetization move may not curb the root
cause of black money.
• This initiative addresses the ‘stock’ of black money but not
necessarily the “flow or fresh” creation of black money
unless some mechanism is built to track the movement of
the new high-value currency notes.
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12. THANK YOU
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