Demonetization is the act of stripping a currency unit of its status as legal tender. In India, the government demonetized Rs. 500 and Rs. 1000 notes on November 8th in an effort to curb black money, fake currency, terrorist funding, and move toward a cashless economy. While there were short term costs like bank lines and economic slowdown, demonetization is expected to increase transparency, tax collection, digitization of the economy, and decrease corruption in the long run. The move constituted over 85% of the total currency in circulation being wiped out overnight.

2. DEMONETISATION
SRAVAN REDDI
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3. What Is Demonetization ?
• 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.

5. BEFORE DEMONETISATION

6. BEFORE DEMONETISATION

7. NOVEMBER 8TH……

10. causes of Demonetization
• There can be many causes of Demonetization
in any economy such as :
1. Black Marketing
2. Currency Storage
3. Corruption
4. Fake currency in the economy etc.

11. Attack On Black Money Holders
• People who possess huge amounts of black
money in hard cash are at a complete loss
now .
• Their black money in hard cash is a pile of
trash after announcement.

12. • Black Money holder cannot Deposit Money
in Bank Account. Than he/she has to Show ID
• There Will Be 200 % Penalty On Income tax
Amount.

13. Death Knell To Fake Currency Rackets
• Most of the fake currencies used to be in the
denominations of Rs.500 and Rs.1000 .
• By banning Rs.500 and Rs.1000 notes, Modiji
has busted all these unethical rackets
completely .
• Now There Will be no use of these Money.

15. End of Terrorist Funding
• Huge sums of money especially in hard cash in
the denominations of Rs.500 and Rs.1000 was
used to fund Islamic terrorists , Naxalites.
• Now , these Organizations will suffer from
shortage of funds .

16. • Most of These terrorist , Maoist Organization
used these Funds for Buying Arms and
Weapons.
• Buying arms is an extremely difficult task
now after this ban .

17. Towards A Cashless Economy
• While it is practically impossible to have a 100%
cashless economy , the proportion of hard cash in the
economy will decrease and our economy will get
more digitized .
• This will result in greater transparency .
• Now government has put Some limitation for Cash
Withdraw from bank Accounts. People Will go for
online payments.
• They Will use PayTM Or other online payment to
companies for Buying goods or Making payments.
• More Use of Debit and Credit Card.

19. End of Huge Donations
• Huge amounts of donation that is taken in the private
education and healthcare sectors would be stopped .
• Schools, engineering and medical colleges and
hospitals ( private ones) used to take huge amounts
of money as donations especially in the form of hard
cash in the denominations of Rs. 500 and Rs. 1000.
• These money-minded people running these
institutions won’t be able to make any easy money
now .
• Same applies to the real estate sector.

20. During demonetisation

21. Cons of Demonetization in India
1. Rush at banks.
2. Shortage of money to common people.
3. Stock market.
4. Problems for house wives.
5. Short term of inflation.
6. Transportation halts.
7. Agriculture.
8. Business.
9. Forecast of GDP growth rate.
10. Drop in industrial output.

23. Will demonetization slow down India’s growth…..?
• Yes, Demonetization will slow down growth rate in short term and
medium term because people have less money in hands. So demand is
low, that is why it is hampering our growth rate. But as soon as people get
money, markets will be back on track.
• But its long term gain is “fictional” or say “disputed”. Some people
theoretically says it will benefit the economy as government will have
more revenue but others say giving a electric shock to the economy when
its already under distress business sentiment can send it into coma.
• India is a cash based economy and demonetization will temporarily
decrease liquidity in this economy. Decreased liquidity will lead to
decreased demand which will result in decreased productivity causing a
slowdown in consumer market.
• People have panicked due to sudden demonetization. This will force
them to save and store more money. Thus, a decrease in demand leading
to slowdown in consumer market.

24. After demonetisation

25. Towards A Cashless Economy
• While it is practically impossible to have a 100%
cashless economy, the proportion of hard cash in the
economy will decrease and our economy will get
more digitized .
• This will result in greater transparency .
• Now government has put Some limitation for Cash
Withdraw from bank Accounts. People Will go for
online payments.
• They Will use PayTM Or other online payment to
companies for Buying goods or Making payments.
• More Use of Debit and Credit Card.

26. So, what has demonetisation done……?
• According to information given to Rajya Sabha by the Union
Minister of State for Finance Arjun Ram Meghwal, there
were 1,716.5 crore pieces of Rs 500 denomination notes
and 685.8 crore pieces of Rs 1,000 notes in circulation as on
November 8, the date on which demonetisation was
announced. That, in value terms, comes to Rs 15.44 lakh
crore. We don’t have figures for total currency or M1 for
this date. But even comparing with the October 28 money
stock data, the value of notes that ceased to be legal tender
worked out to nearly 87% of the total currency in
circulation (both with the public and as cash with banks)
and 56% of M1. Since M1 is the most liquid part of money
supply, it translates into 56% of liquidity in the economy
getting withdrawn overnight

28. CONCLUSION
1. The advantages are much dominating and it will
be in the long term interest of our country
comfortably outweighing the disadvantages.
2. Government need to take all the necessary steps
so as to ensure that there will be a smooth flow
of currency exchanges.
3. It will make a massive change in our economy.
4. We congratulate the entire government and
those hidden brains of our democracy who
brought this decision.