The document is a student project on demonetization in India from 2016. It includes an introduction explaining that ₹500 and ₹1000 notes were demonetized on November 8, 2016. The objectives are to explain demonetization, report on the situation in India during it, and its impact. Tables of contents and sections cover the meaning of demonetization, its objectives like countering black money and terror funding, the chaos and confusion during the period, and both positive and negative economic impacts like a reduction in black money and GDP. In conclusion, the author notes the decision was abrupt and not well-planned regarding cash shortage issues.

1. THE BISHOP’S CO-ED SCHOOL,
KALYANINAGAR
ICSE PROJECT 2022 -2023
STUDENT NAME:VANSHIKA SONI
CLASS: 10 SECTION: A
ROLL NO: / COMPUTER CODE:160837
TOPIC: DEMONETISATION
SUBJECT TEACHER: SHREYA SHARMA

2. INTRODUCTION
On November 8, 2016, the
government announced a bold
measure with profound implications
for the economy. The two largest
denomination notes, ₹500 and
₹1000 were "demonetised" with
immediate effect, stripping them of
their legal tender.
This project has the following
objectives:
1. To explain in detail the meaning
and objectives of
demonetisation.
2. A brief report about the
situation in India during
demonetisation.
3. The impact demonetisation had
on our economy.
Your
Logo

3. Table Of
Contents
Situation in India
during Demonetisation
Objectives of
Demonetisation
Impact of
Demonetisation
Meaning of
Demonetisation
Conclusion
Bibliography

4. When a currency note or
notes of particular
demonetisation ceases to
be a legal tender, it is
termed as Demonetisation.
Meaning of
Demonetisation

5. Objectives of
Demonetisation
Counterfeit
Currency
The high value notes have always
been used in illegal transactions.
The ban of such notes would
have eliminated the cause of
corruption in the economy itself.
High value notes
were also being
used by terror
agencies to fund
terror activities. The
ban of such notes
would cease the
happening of such
heinous activities.
Terror Funding
Corruption
Black Money
The demonetisation act’s main
objective was to stop the
circulation of unaccounted
money or as more popularly
known black money.
Circulation of huge amounts of
counterfeit currency in the economy was
causing inflationary pressure in the
economy. To eliminate the circulation of
such fake currency demonetisation was a
necessary step.

6. • The people were in a mixed state of shock and utter confusion,
as this was an event people did not expect any time at all.
• The very next day the whole of India fell into chaos, with
people waiting in long lines for exchanging their notes.
• This was because they were allowed to exchange a really little
amount of notes as there was a great shortage of the new
notes, which wasn’t very shocking as this move was quite
abrupt and not well planned.
• And the situation didn’t get any better with time as the ATMs
were out of cash for around months after demonetisation.
• This move left the uneducated people of the rural areas and
farmers devastated as these people highly depended on cash.
Situation in India during
Demonetisation

7. The Cash
Situation
The above illustrations show the pertaining cash situation in the Indian economy
during demonetisation.

8. The act of demonetisation was
clearly an abrupt and unplanned
event. This event had many long
lasting effects on our economy. We
will now see these effects.
Impact of
Demonetisation

9. The
Positives
Demonetisation was a big thrash to the hawala racketeers. In
Hawala money is transferred without its actual movement.
Hawala had become the route to facilitate money laundering
and terror funding. Hawala rackets run on black money. The
sudden withdrawal of black money out of the economy was a
surgical strike to hawala operations. Destruction of currency
notes by hawala operators have also been reported.
Hawala transactions
With Prime Minister Modi’s demonetisation decision to ban old
currency notes of Rs 500 and Rs 1,000 notes and replacing them
with notes having highly advanced security features which are
barely possible to replicate, he has given a mighty blow to the
operators of such fake currency rackets.
Counterfiet Currency
Prime Minister Narendra Modi on a single stroke has choked
the operators of black money who run a parallel economy
which weakens the base of our country’s economy. Modi’s
decision resulted in the collection of huge deposits with the
bank, all unaccounted money has either been deposited into
the banks with the heavy penalty or been simply destroyed.
Black Money

10. Withdrawal of highest currency notes reduces the growth rate
of the economy. Demonetisation reduces consumption pattern,
income, investment etc. This may bring a slowdown in India’s
growth rate as the liquidity crisis itself may last three-four
months.
Decrease in GDP
Cash shortage adversely affected the consumption behaviour of
the people in India. The sales of consumer durables likely to be
hampered in short-term, especially sales through un-organized
channels are cash purchases. Most of the purchases by retailers
are through cash which brought down their volume of trade.
Consumption
Most of the population who constitute the lower middle and
lower class uses currency to meet their daily transactions. Such
class of the society such as daily wage labourers, small traders
and other marginal section of the society use cash more often.
These sections of the society have lost their income in the
scarcity of cash. Cash crunch made firms to cut their labour
cost and thus reduces the income of the lower middle class.
Loss of well-being
The
Negatives

11. The government under Prime Minister Modi did not execute the decision
to its upmost potential. The idea of removing 86% of the currency did
have logic, but the planning and opportunity costs were not taken into
consideration. I personally feel that this decision could have been
planned, in coordination with all states and banks to ensure that was no
problem of shortage of cash, as well as the timing could have been given
more thought as the agricultural sector had to suffer major losses during
its peak period.
Conclusion

12. ● https://wallpapercave.com/indian-rupees-wallpapers
● https://digitalcommons.georgiasouthern.edu/cgi/viewcontent.cgi?article
=1498&context=honors-theses
● https://www.scoopwhoop.com/ - used for graphs and search reports
● https://www.toppr.com/guides/essays/demonetization-essay/
● https://ssbinterviewtips.in/demonetisation-in-india-positives-and-
negatives/789#:~:text=In%20India%2C%20GDP%20is%20slowing%20do
wn%20due%20to,the%20past%20few%20months%20in%20Jammu%20a
nd%20Kashmir.
● https://www.ft.com/
Bibliography

13. Thank
you!!