A comparison study of the Demonetization strategy took place in the last month of 2017, India and Venezuela. Even though a lot of set backs happened in India, it was finally settle down for good. but in Venezuela government roll back its move

1. DEMONETIZATION: INDIA v/s
VENEZUELA

2. Demonetization
• Demonetization is the act of stripping a currency unit
of its status as legal tender.
• French were first used the term Demonetization
• Reasons can be
1. to combat inflation
2. to combat corruption and crime
3. to discourage a cash-dependent economy
4. to facilitate trade

3. Examples of Demonetization
• Coinage Act USA in 1873 – demonetized silver to
promote gold standard.
• European Union 2002 - Natural currencies of member
countries demonetized and embraced the Euro
• North Korea 2010 - dictator Kim Jong-2 changed the
currency system, but failed and the finance minister was
executed
• India 2016- Prime minister demonetized higher
denomination notes and introduced new series notes

4. Demonetization in India
• On Nov 8, 2016 PM Modi demonetized 500, and
1000 bills through an Televised address
• Banned notes constitutes 86% total circulating
money in the market
• Introduced new series of 2000 Rs and 500 Rs notes,
1000 Rs notes will start to print soon
• People had time until December 31 to exchange
banned currencies
• It is the 3rd demonetization move in India

5. Reasons for Demonetization
• To fight parallel economy of black money
• To destroy the terror funding networks
• To bring more people under income tax scanner
• To increase the tax revenue
• Transformation from cash economy to cashless
economy

6. History of Indian Demonetization
• In Jan 1947 1000, and 10000 bills were
demonetized and in 1954 new bills of
1000,5000,10000 were introduced.
• In 1978 – HM Patel (Janatha Party) then
Finance minster demonetized 1000, 5000,
10000 Notes.

7. After effects
• Chaos ensured in the cash based economy
• Long queues formed in front of banks
• Deaths were reported
• Initially received good support but were
seeing to reduce due to poor execution
strategy
• GDP rate is decreased to 7.1 from 7.9

8. Result
• 97% of the circulated money returned
• As of Feb. 2017 12 crore lakh rupees are in
circulation
• Booming of digital wallets and digital
transactions were seen

9. Demonetization in Venezuela
• On December 11 president Maduro
announced 100 bolivar bill ceased to be legal
tender
• People can use the notes only for next 72
hours
• 10 days exchange period is announced
• Kilometers of long queues were seen in front
of banks
• People loses their temper and went outrage.

10. Socio – economical background
• Venezuela is worlds top criminal state
• Venezuela has words largest oil reserve and
contribute half of national income and 95% of
total export
• 1998 socialism takes power in Venezuela – Hugo
Chavez – banned privatization- banned foreign
investment
• It poses worlds highest inflation rate 100%
• Too much dependent on oil causes its economical
imbalances

11. Demonetization
• 100 bolivar notes were banned
• It accounts 48% of total currency circulation
• Inflation rate increases to 180%
• New note introduced was 200 times higher
than the banned bill
• People opposed the move.

12. Reason for Demonetization
• Smuggling on Borders
• Currency exchange rate system
• International oil prices

13. Result
• Public went outrage, looting, protests
• Police had to detain 300 people on criminal
activities followed by the decision
• One death were reported
• Finally government postponed the
demonetization decision.

14. INDIA v/s VENEZUELA
• Motive
• Percentage of Banned Currency Notes in
circulation.
• Public Support
• The replacement
• The Economy
• Time given by government
• Execution
• Criticism

15. Conclusion
• In India the successfulness is still debated,
even though government able to achieve
digitalization objective
• Severe outrage from public was not seen as
compared to Venezuela
• Venezuela has the weak economy hence they
couldn’t successfully implement the decision –
roll back
• In India the fruit can be seen in near future

16. Thank You !!