4
CURRENT ISSUE
What is demonetization ?
All about demonetization
In a major step to check undeclared black money , the Government of India on the 8 November 2016 announced the ban of `500 and `1000 banknotes with effect from the same day ’ s midnight , making the notes invalid , in its fight against the black money . Apart from combating black money , the stated purpose is also to check fake currency ( helped to finance terrorism ) and corruption . This has come as a surprise to everybody , the citizens , the nation and even within most of the government too . This move also known as currency demonetization . Now let us understand what is black money ? what is demonetization ? and the history currency demonetization in India . What is black money ?
Income earned from illegal activities or the income that is not reported to the government for tax purposes .
What is demonetization ?
In simple terms demonetization is defined as withdrawal of a particular form of currency from circulation .
What is demonetization for us ?
Demonetization for us means that Reserve Bank of India has withdrawn the old ` 500 and ` 1000 notes as an official mode of payment .
What was the reason ? The reasoning given by our Prime Minister was :
• To tackle black money in the economy .
• To lower the cash circulation in the country this is directly related to corruption in our country .
• To eliminate fake currency and dodgy funds which have been used by terror groups to fund terrorism in India .
WINSPIRE : Empowering youth | December , 2016