Changing of Currency

1. Presented by : Shailaja
Roll No: 09

2. Index
Demonetization
Cause of demonetisation
What happen to demonetisation?
Demonetization history and background in
India?
Positive and Negative effects?

3. Demonetization is the act of
stripping of a currency unit
of its status as legal tender.
Demonetization is
necessary whenever there is
a change of national
currency.

5. On 8 November2016 PM Narendra Modi announced
the demonetisation in an unscheduled live televised
address at 20:00
Modi declared that use of all Rs. 500 and
Rs.1000banknotes would be invalid past midnight,and
announcedthe issuance of new Rs.500 and Rs.
2000banknotes in exchange for the old bank notes.

6. There can be many causes of demonetization in
any economy some of them are:
Introduction of New currency, Black Marketing,
Currency storage, Corruption and others.
There will be excess Fake currency in the
economy in main reason of demonetization.

9. on 8th November 2016, government of India had
announced that from today onward rupees 500 and
1000 rupee note will not be a legal tender.
This mean that 500 and1000 rupees will be accepted
by anyone expect the organization declared by
government.
They can change the currency from the banks and
post offices till 30th December 2016

10. Demonetization History and
Background in India
This is not the First time when Indian currency is
demonetized in India.
The first instance was in 1946 and the second in
1978. when an ordinance was promulgated to
phase out with denomination of Rs.100 and 5000
and 10000
The highest denomination note ever printed by
the these RBI was the 10,000 note in 1938 and
again in 1954. But these notes were
demonetisation in January 1946 and and again in
January 1978, according to RBI data

11. Positive impact of demonetization:
There is huge impact of demonetization of Indian
Economy, These 500 and 1000 Notes contribute more
than 84% of money circulation.
End of terrorist funding
Attract on Black money Holders.
End of huge donations
Hawala transactions end.
Less chance of a voiding taxes.
Parallel economy

12. Rush at Banks.
Shortage of money to common people.
Problem for House wives.
Difficult for those families those have Weddings.
Due to shortage of money in the market, a short term
cost push inflation will occur.
The price of gold has already become sky high
Prices of vegetables and fruits have soared burdening
the common man.

14. Advantages of demonetization
 Track of unaccounted cash
 Stop illegal activites( for time being)
 Increases Tax Revenue= more govt expenditure.
 Disadvantages of demonetization
 - Chaos
 Middle class and poor effected
 Won’t stop black money generation
 Real Estate falls (11% of GDP )
 Rural population depend on cash
 Recession