A SHORT AND GENERAL PPT COVERING ASPECTS LIKE REACTIONS OF PEOPLE,IMPACTS OF DEMONETISATION:POSITIVE AND NEGATIVE,EFFECTS ON 3 SECTORS AND EFFECT ON THE INDIAN ECONOMY. ALL THE BEST!!!!!

1. DEMONETISATION
OF INDIAN CURRENCY

2. WHAT IS DEMONETISATION?
 Demonetization is the act of stripping
a currency unit of its status as legal tender.
Demonetization is necessary whenever there is a
change of national currency. The old unit of
currency must be retired and replaced with a
new currency unit.

3. On 8 November 2016, Prime Minister of India Narendra
Modi announced the demonetisation in an unscheduled live
televised address to the nation at 20:15 IST. In the
announcement, Modi declared circulation of all ₹500 and ₹1,000
banknotes of the Mahatma Gandhi Series as invalid effective
from the midnight of the same day, and announced the issuance
of new ₹500 and ₹2,000 banknotes of the Mahatma Gandhi New
Series in exchange for the old banknotes.

4. EXCHANGE OF OLD NOTES
 The Reserve Bank of India stipulated a window of fifty days until
December 30, 2016 to deposit the demonetised banknotes in bank
accounts. The banknotes could also be exchanged over the counter of
bank branches upto a limit that varied over the days:
 Initially, the limit was fixed at ₹4,000 per person from 8 to 13
November.
 This limit was increased to ₹4,500 per person from 14 to 17
November.
 The limit was reduced to ₹2,000 per person from 18 November.
 All exchange of banknotes was abruptly stopped from November 25,
2016.
 International airports were also instructed to facilitate an exchange of
notes amounting to a total value of ₹5,000 for foreign tourists and
out-bound passengers

5. REACTIONS OF GENERAL PUBLIC
Strikes
 As the demonetisation was opposed in both houses of
the parliament, it triggered organised nationwide
strikes across India.
 The Opposition involving parties like Indian National
Congress, BSP,DMK, JD(U), AIADMK, Nationalist
Congress Party, Left, Rashtriya Janta Dal and
the Samajwadi Party decided to observe ‘Akrosh Diwas’
as, a protest campaign day on November 28 and launch
protests in front of banks, demanding that money be
returned to people.

6. Support
 The decision met with mixed initial reactions. Several bankers
like Arundhati Bhattacharya(Chairperson of State Bank of India)
and Chanda Kochhar (MD & CEO of ICICI Bank) appreciated the
move in the sense that it would help curb black money. Infosys
founder N.R. Narayna Murthy praised the move.
 Finance Minister Arun Jaitley said that demonetisation would
clean the complete economic system, increase the size of
economy and revenue base

7. Criticism
 The Indian Supreme Court while hearing one among a slew of cases
filed against the sudden demonetisation decision in various
courts, observed that it "appears to be carpet bombing and not surgical
strike" which government repeatedly claims it to be.
 Nobel laureate Indian economist Amartya Sen, severely criticised the
demonetisation move calling it a "despotic action" among other things.
 Former Senior Vice-President and Chief Economist of the World
Bank, Kaushik Basu, called it a 'major mistake' and said that the
'damage' is likely to be much greater than any possible benefits.

8. Facts and figures
 It has been reported that 97% of the demonetised
notes are back in banks and banks have received Rs
14.97 trillion ($220 billion) as of December 30 out of
the 15.4 trillion rupees that were demonetised. The
return of 97% of money back in bank have a
negative impact on government's move against black
money.

9. Reasons for Demonetization IN INDIA
•We knew terrorism is a frightening threat, but who funds
these terrorists? Our enemies they use the fake currency
to sponsor terror-this was proven many a times.
•Corruption and black money are the major obstacles in
our country. It is weakening the efforts to remove poverty.
Our country is rapidly increasing in terms of growth and
we are in No.1 position in terms of growth but we are
ranked 76 in Global Corruption Perception ranking. It
clearly shows how corruption and black money have
spread their tentacles.

10. Percentage share of Denominations before
Demonetization

11. IMPACT OF DEMONETIZATION
Sinha's Presentation

12. POSITIVE IMPACT:
• The major decision which is made by the government will
help us to eradicate black money, corruption to some
extent by replacing the cash transactions in our daily
activities.
Also Financial Intelligence Unit will track all details of
the transactions from the banks. So now it is really difficult to
get rid of the black money.

13.  The Demonetization has badly hit Maoist and
Naxalites as well. The surrender rate has reached
its highest since the demonetization is announced.
It is said that the money these organizations have
collected over the years have left with no value and
it has caused them to reach to this decision.

14. • Real estate industry is totally corrupted and now by this
stringent decision the real estate sector will bring in
more transparency. By doing it in this way we will have
more credibility, making it more attractive to the
foreign investors as well as domestic investors.

15.  A huge fall in HUMAN trafficking. All the transaction
of selling and buying used to happen through cash
mainly in the form of ₹500 & ₹1000 notes but now
there is no liquidity which has hit the business badly.

16.  Hawala transactions – Demonetisation has crippled the
hawala rackets. Hawala is a method of transferring
money without any actual money movement.
Hawala is used as a means for facilitating money
laundering and funding terror.

17. NEGATIVE IMPACT:
• The scarcity of cash due to demonetisation led to chaos,
and most people holding old banknotes faced difficulties
exchanging them due to endless lines outside banks and
ATMs across India, which became a daily routine for
millions of people waiting to deposit or exchange the ₹500
and ₹1000 banknotes since 9 November.

18.  Several people were reported to have died from
standing in queues for hours to exchange their old
banknotes. By the end of the year 2016, opposition
leaders claimed that over 100 people had died due to
demonetisation.

19.  The day after the demonetisation announcement, BSE
SENSEX crashed nearly 1,689 points and NIFTY
50 plunged by over 541 points.By the end of the
intraday trading section on 15 November 2016, the BSE
SENSEX index was lower by 565 points and the NIFTY
50 index was below 8100 intraday.

20.  Agriculture
 Transactions in the Indian agriculture sector are heavily
dependent on cash and were adversely affected by the
demonetisation of ₹500 and ₹1,000 bank notes. Due to
scarcity of the new banknotes, many farmers have
insufficient cash to purchase seeds, fertilisers and
pesticides. Farmers and their unions conducted protest
rallies against the demonetisation.

21.  Dumping of agricultural produce
 The demonetisation led to unavailability of cash to pay for food
products. The reduction in demand that arose in turn led to a
crash in the prices of crops. Farmers were unable to recover
even the costs of transportation from their fields to the
market from the low prices offered. The prices dropped as low
as 50 paise per kilo for tomatoesand onions.This forced the
farmers across the country to dump their products in
desperation. Some farmers dumped their produce in protest
against the government.

22.  Business
 By the second week after demonetisation of ₹500 and ₹1,000
banknotes, cigarette sales across India witnessed a fall of 30–
40%, while E-commerce companies saw up to a 30% decline
in cash on delivery (COD) orders.
 The demand for point of sales (POS) or card swipe machines
has increased.E-payment options like PayTM and , has also
seen a rise. According to data of Pine Labs, the demand for its
POS machines doubled after the decision..

23. List Of Countries That Have Tried Demonetisation
1. Nigeria
2. Ghana
3. Pakistan
4. Zimbabwe
5. North Korea
6. Soviet Union
7. Australia
8. Myanmar

24. Mode of payments
Cash
E-Payment
Barter System
Various modes of
Payment:

25. CASH :
India’s economy relies predominantly on cash, the effects
will be far greater. ATMs are scarce, and few rural Indians
have a credit or debit card. An estimated 600 million
Indians—nearly half the country’s population—are without
a bank account. Three hundred million have no
government identification, necessary to open an account.

26. CASH (CONTD.) :

27. Electronic Payment is a financial exchange that takes
place online between buyers and sellers. The content of this
exchange is usually some form of digital financial instrument (such
as encrypted credit card numbers, electronic cheques or
digital cash) that is backed by a bank or an intermediary, or by a
legal tender.
• All Central Government Departments and
Public Sector Enterprises are being
instructed to use the method of e-
payments to the maximum extent possible.
• RBI has advised National Payments
Corporation of India (NPCI) to waive its
transaction charges on transactions
settled through National Financial
Switch(NFS) till 31st December, 2016.
• Banks are also being advised to waive
similar charges currently levied by them.

28. BARTER SYSTEM
TRADE WHAT YOU HAVE, TO GET WHAT YOU WANT.!!
Inevitably, low-income and rural households have been hardest hit by Modi’s
currency reform. Barter economies have reportedly sprung up in many towns
and villages.

29. Effect of Demonetization on Indian
Economy
• It will likely hit the economy hard in the short term..
The service sector, which dominates economic activity
and involves a sizable chunk of cash transactions, will
likely be hit the hardest.
• GDP growth in the quarters from September to
December 2016 and January to March 2017 could be
significantly lower than previous years. Some bounce
back should be seen in the first quarter of fiscal 2017–
2018.
• The demonetization that has been in effect since
November 9 is expected to have a negative impact on
inflation. Consumer spending activity fell to a near
halt.

30. Will Demonetization in India Impact
Your Loan Burden?
Rates are already on the decline
After the demonetization announcement on November 8, Indian banks saw
a rise in deposits.
Banks also saw a rise in term deposit accounts since the demonetization.
Due to these factors, commercial banks sharply reduced their deposit rates.
Loan burden will also fall
Apart from cutting deposit rates, banks reduced their lending rates as well.
In India, loans sanctioned from April 1,2016 are with reference to the MCLR
(Marginal Cost of funds-based Lending Rate: The marginal cost of funds
based lending rate (MCLR) refers to the minimum interest rate of a
bank below which it cannot lend), instead of the Base Rate, which was
used earlier.
It will translate into lower interest rates on existing floating rate loans and
new loans.

31. Will Demonetization in India Impact
Your Loan Burden?(Contd.)

32. CONCLUSION
The advantages are much dominating and it will be in the
long term interest of our country comfortably outweighing
the disadvantages. Government need to take all the necessary
steps so as to ensure that there will be a smooth flow of
currency exchanges. It would turn into chaos if government
takes no necessary steps to circulate money correctly. It will
make a massive change in our economy. We congratulate the
entire government and those hidden brains of our democracy
who brought this decision.

33. THANK YOU
MADE BY:
MAYANK(016)
BPIBS(IP UNIVESITY)