Essay on Demonetization for Class 10, 12, Mains Exam (UPSC, PSC, SSC)
Demonetization is a process of eliminating certain currency value of notes andto introduce new currency notes into the system. Demonetization was lately introduced by the Government of India by eliminating the use of old Rs. 500/- and Rs. 1000/- notes and introducing new Rs. 500/- and Rs.2000/- notes into the financial system. Which were distinguished from the old noted in terms of colour, print design, size, etc.
The main reasons to introduce demonetization was to eliminate black money, corruption and high value cash transactions from the monetary system.
Several official would accepting bribes in form of cash which included high value currency notes like Rs. 500/- and Rs. 1000/-, which were stacked at their homes instead of flowing through the monetary system. Thereby leading to massive corruption and black money being used also for purpose of terrorism.
In order to eliminate this, the Government introduced demonetization in the year 2016, stating that the old Rs. 500/- and Rs. 1000/- notes will no more have value in the monetary system and these had to be exchanged with new notes introduced by the Government and RBI. The very next day bank were crowded with big queues as every individual who had cash of these old currency values had to exchange and get the new notes.This caused chaos in the country as bank had to be kept open late hours, most of the bank employees had to work overtime due to huge crowd. Several banks had shortage new currency notes and hence had to be shut until new currency notes were available.
This made it very difficult for the middle class as they had their money strapped in the banks, and several stores began to decline accepting the old currency notes for any purchases made or even could not accept new notes due to its high value and change was not readily available.
Several individuals who withdrew large sums of money prior to demonetization found it very difficult to change these huge sums in the bank due to tedious procedures of filling several forms and lack of new currency notes made readily available.
Also See: Rs. 2000 Denomination Banknotes – Withdrawal from Circulation; Will continue as Legal Tender
At the on set of demonetization several raid have taken place where in huge sums of cash stacked at officials home received through bribes have been recovered. This benefited to eliminate black money and corruption to a certain extent.
Demonetization to a certain extent helped reduce black money and corruption, but after Demonetization as well black money and corruption continues to exist, despite of the several measure been taken by the Government.
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