This document discusses India's demonetization that occurred in 2016 when the government withdrew the Rs 500 and Rs 1000 currency notes from circulation. It provides background on what demonetization is and the history of it in India. The objectives of the 2016 demonetization are described as targeting black money, corruption, terrorism financing. The impacts of demonetization on various sectors of the economy are discussed such as agriculture, banking, real estate, tourism, education, and healthcare. Challenges of the demonetization process and its effects in rural areas are also summarized.

1. DEMONETIZATION
IN INDIA
BY KOMAL HAMBIR
RUCHIRA MOHITE
NIKITA JAIN
MALVIKA RAO

2. Demonetization is the act of
stripping a currency unit of
its status as legal tender. It
occurs whenever there is a
change of national currency:
The current form or forms of
money is pulled from
circulation and retired, often
to be replaced with new
notes or coins. Sometimes,
a country completely
replaces the old currency
with new currency.
A master stroke by Mr Modi.
A brilliant move that needs
to be supported by every
Indian citizen. It targets to
hit corruption, bribery, cross-
border funded terrorism,
dowry, hoarding money, tax
evasion etc. The main idea
is to provide new currency.
DEMONETIZATION

3. INTRODUCTION TO
DEMONETIZATION
De
(degrading)
Money (salary
importance)
ti (in the)
zation
(nation).
The vocabulary spirit of DEMONETIZE
is “To rob (a ingot) of its capability as a
financial specification” or “To withdraw
from use as currency”
Demonetization means bring to
terminate the predominance of certain
currencies of an economy whereas
demonetization i.e. replaces currency
with newly designed currencies is done.

4. NEED OF DEMONETIZATION
The three
main
masterstro
kes to be
tackled due
to which
need for
demonetiza
tion arises
are:-
Parallel
economy,
Counterfeit
currency
Terror
financing

5. NEEDS
1) To eradicate all the parallel economy.
2) To lower the cash flow in the country, this is directly related to bribing in our country.
3) To eradicate all the counterfeit currency and doubtful funds which have been used by
trepidation parties to account terrorism in India.
4) To prevent the money laundering activities used to finance terrorist organizations.

6. TOP 10 BENEFITS OF DEMONETIZATION
1.Loans & Borrowing from Banks and Financial Institutions will become economic.
2. Houses will be reasonably priced and affordable to common man.
3. In Asset Markets
4.Bonds prices to increase in the near future.
5.Real estates and Gold prices are being descending.
6.with drop initially, Equity markets to gain in next six to 12 months.
7.FDI to sky rocket.
8.Fiscal deficit
9.Currency is likely to become stronger, other things being equal.
10. Inflation will move downwards.

7. CHALLENGES
Government had not
made any alterations in
ATM's so skillful pass
problems in cash swap
process.
Biggest Disadvantage of
Demonetization will go out
with traveler who have only
old annotation and no
connections in the area.
A big detriment of
demonetization is the hard
earned silver capital,
surpassing exhaustively of
2.5 lacs, can stand for
many issues for common
man.
At some Places banks
are sidelined to knob the
hardship of Public as
specie annotation
exhaust stock.

8. HISTORY OF DEMONETIZATION
Times of yore nearby 38 years ago, in the
year 1978, Prime Minister Morarji Desai,
pronounced to demonetize Rs 1,000,
5,000 and 10,000 notes in a bid cut and
thrust disagreement in the midst of the
white capital and black capital .
On January 16, 1978, the government
said that high value notes would be
excluded from our realm and on that day
all banks and treasuries of governments
would be bolted for transaction purposes.

9. The Demonetization Act, 1978,pierced in , which elicited
the high valued currency and revolutionalized the Indian
economy chapter.
This law made that any infringement such as false
statement by investors and others would be indictably
punished — with a one or a three year prison term.
It was also specified that people coming to invest notes in
banks require to fill up forms, and if spotted with large
amount of money, the bank would inform the Information
Technology Department.
Furthermore if the people could not clarify their source of
income, the Information Technology Department would
charge taxes as high as 90 percent.
HISTORY OF DEMONETIZATION

10. OBJECTIVES OF DEMONETIZATION
1)Removing Black
Money From
Country:
As People Who Are
Having Black Money
Will Now Be Left
With Nothing
Particularly. All The
Cash Which Resides
Below The Pillow,
Will Now Be
useless.
2) Stopping Of
Corruption: By
Removing The
Currency Notes
From Circulation, It
Will Have A Direct
Impact On
Corruption.
3) Stopping Terror
Funds: Because Of
Demonetisation, The
People Or
Organisations Who
Used To Fund Terror
Groups Will Be Now
Sitting Without Any
Works.

11. 5)To Send A Clear Message That This Government Is Well Inclined Towards
Working For The Development Of Nation: -
Because Of His Bold Step, It Will Send A Clear Message That This Government Is Well
Inclined Towards Development Of Nation.
It Will Also Send A Message To The International Community, That The Government Is
Doing Constant Efforts To Make India A Better Place To Invest And A Better Place To Do
Business.
6)Storage of Unaccounted wealth:-
High denomination bank notes were used for storage of unaccounted wealth as
obvious from the large cash retrieval made by law enforcement interventions.
OBJECTIVES OF DEMONETIZATION

12. IMPACTS OF
DEMONETIZATION

13. AGRICULTURE
 Agriculture plays a prominent role in India’s
husbandry.
 The out and input channels and the price of
the seeds and growth promoters.
 Also the farmers and retail shopkeepers due to
lack of knowledge about the cash less
transaction, were unable to earn profit and
make market.

14. AGRICULTURE
Largely affected:
marginal and small
farmers who sell
their produce in the
nearby villages
Chains with direct
consumer sales
such as fruits,
vegetables are also
hit.
These are
indications of the
crying need for
modification.
Agriculture was
expected to grow at
4%, India is currently
amidst the winter
sowing season, but
farmers behave over
cash to buy seeds.

15. BANKING
As a large part of cash is moving towards the banking
channels, the banking sector is likely to be flush with the funds
in the coming time which would help them to reduce cost of
finance for such period.
With cash transactions brunt by a reduce in liquidity,
supplementary payment methods, such as e-wallets, online
transactions using E-banking, debit and credit card usage have
enlarged significantly

16. BANKING
 This will motivate the use of
different payment methods around
the country, a shift towards
cashless.
 The higher CASA means a large
amount of deposits are in current
and savings accounts, so the
banks get funds at a negligible or
small cost interest.
 So it is a good evaluation to get
deposits at no or very low cost.
 The banks are expected to make
good amount of profit which would
ultimately benefit the people.
 Banks will lend the money at a
lower rate of interest, so the
interest rate will go down.

17. REAL ESTATE
Unofficial funding in
the form of cash
transaction: the land
zone(Land for sale) be
right to be adversely
affected
Reduction in cash
transactions in real
estate.
This is likely to reduce
to real estate prices.
Effects on
infrastructure and
construction sectors,
such as the steel and
cement industries.
Luxury property rates
are therefore predicted
to fall off as a result of
fewer purchasers with
substantial liquidity.

18. TOURISM
Travelers
advent to India
from separate
countries at this
present time
may have to
face some.
Making
payments with
notes in the cult
of INR 500 and
INR 1,000
would no longer
earn entirely
places.

19. TOURISM
 Booking India tour packages networked perhaps miles to expect an
stunning layoff even amidst this entire operation.
 The front-runner external vacation destinations of Indians like
Thailand, Dubai, Singapore, Malaysia, Maldives, Hawaii, Sri Lanka
and Indonesia will see the gloomy collide of demonetization on
touristry revenues as all threatening capital sponsored trips will be
cancelled.

20. EDUCATION AND TRAINING
1.4 million schools
with over 227
thousand students
entered and likewise
36,000 more
advanced teaching
institutes
There would be
decline in the
rate of growth of
private schools
The push to
online payments
at school will be
promoted. Now
more schools
will start
accepting
money in non-
cash forms.
This means a
tap to existing
fee payment,
school uniform
and bookstore
platforms.

21. EDUCATION AND TRAINING
 More and more tutelage
teachers and coaching schools
will move to online payments.
 Lowered spends on Research
shall be impacted, holding
back on new projects.
 More admissions of children
are expected due to the
lowering of prices and
payment, so promotes
education.

22. HEALTHCARE
Healthcare is the sector
which is been experiencing a
steady growth over the years
in Indian economy. The total
industry size is expected to
touch US$ 160 billion by
2017 and US$ 280 billion by
2020.
IMPACT :40% of this sector
is cash based and therefore
there have been a significant
deviation observed here due
to demonetization. There
have been drop of about 10 -
15% in the out-patient
number.

23. The gems and
jewellery sector
contributes to the 6
to 7% of the Indian
GDP and it is also
the fastest growing
sectors. There is a
great amount of
export ongoing in
this sector with fair
employment as it is
highly labor
incentive
Impact:
The organized
segment will be
compare
beneficial in to
the unorganized
one.
Gold imports
through the
unofficial
channels are
likely to reduce.
When it comes
to jewellery
exporters there
will be no
significant
impact as it is
highly organized
segment and
sales are
against invoices
GEMS AND JEWELLERY

24. AUTOMOBILE
The Indian automobile industry is
responsible for employing 7 to 8 per cent
of India’s total employed population as of
2013. This has resulted in the
development of new urban settlements
with civic amenities for healthcare and
education, thereby bettering life style as
well.
Impact-Overall automobile sales dropped
by 5.48% (year on year) in November
2016 sharpest drop in sales in 4 years. In
the rural areas especially for two
wheelers banks and NBFCs don invest
so much and therefore lot of purchasing
happens with cash and that is where the
crunch is. Therefore, manufacturers are
now offering cashless schemes.

25. RURAL AREA
There always has been a plight between the urban and rural India when we discuss about
various factors.
There is a major difference between both of them and we cannot ignore it.
Here is where the implementation comes into play. Rural Indian communities are close
knit and mostly deal on trust.
The rural economy is an serious sector of the environs and accounts for approximately
70 percent of contracting and 50 percent of GDP with agriculture body the main operator
followed by services and manufacturing.

26. IMPACT-
People in rustic India who have a
serious on the part of Rs.1000 and
Rs.500 marginalia, but no proper
channels of testimony will have a
rough time in exchanging their report.
Demonetization has affected various
other sectors like steel wherein 60%-
70% of the business is undergone
through cash.
Though business with the distributors
is majorly with RTGS and it’s just the
final consumers who deal with cash.

27. THANK YOU.