When Narendra Modi announced the banned on 500 or 1000 Rupees Note, that time there are lot of the people which have no idea about its benefits. so Let’s learn about Benefits on 500 or 1000 Rupees Banned.
On 8th November midnight, a shock came to people as PM Modi announced a Battle against corruption and black money with the aid of demonetising Rs 500 and Rs1000 notes which will be no longer a legal tender. The RBI Governor Urjit Patel said that it will not impact upon the liquidity in the wholesale market and new notes have been produced over the last few months.
The newly launched currency are said to be safer which makes it hard to produce a fake note. It will affect all the citizens of India but it is a beneficial step in the transparent and corruption free India.
As every coin has two sides it has both upsides and downsides. This step also has some advantages and Drawbacks. But 1st we will discuss the aim of introducing such harsh step.
Reason behind banning the currency notes :
These notes were banned in order to prevent the illegal financial transactions like Fake currency, Black money, Corruption and money laundering which has been in India for many years. This required removal of big currencies in order to prevent these illegal financial activities.
The fake Indian currency is more in higher denomination notes. For a common man, it is difficult to distinguish fake notes and genuine notes. These currencies are used by a terrorist, for hoarding black money and for illegal activities. Curbing these notes was important.
Benefits on 500 or 1000 Rupees Banned
- It will help the government to fight with the problems like black money, fake currency, corruption, and terrorism.
- The banks can now do more lending as people who have a lot of cash legally earned will be depositing it in the banks. The loans will also become easier and interest rates may come down.
- The activities like arms smuggling, espionage will be halted due to lack of funding them.
- It will curb the unaccounted cash in the real estate as well as other sectors and will bring more transparency.
- The limit on the ATM withdrawal by debit one card is Rs 2000 per day and will be increased to Rs 4000 in near future. The limit on the withdrawal from banks will be limited to Rs 10,000 a day and Rs 20,000 a week. These limits will help in driving card payments across the country.
- It will be easy for the government to track the money exchange in the banks as it can be done only after providing the valid identity cards like PAN, Aadhaar etc.
- Prices of houses, Gold, commodities and stocks are expected to decrease in future.
- The common man will be benefited from this in the Higher Education, Real Estate and Healthcare transactions as the artificial increase in the prices due to corruption etc will fall down.
- The rupee will be positively impacted and inflation will go down benefiting the poor and middle-class
Due to this investment in gold and jewelry will increase as more people will try to convert paper money into gold which will eventually increase investment in the government’s gold monetization scheme.
Drawback of the scheme :
- It has caused inconvenience to the people in the exchanging the demonetized currency notes.
- It can become a costly idea for the government, as to print Rs 100 notes will cost RBI about Rs. 11,900 Cr.
- Difficult for the common man who does not have knowledge or does not have ATM, internet banking etc.
- In short term, small business or daily wage earners will be affected as they will have to leave their work and stand in a queue to exchange their hard earned money.
- This scheme will not affect the black money in the form of gold or foreign currency.
- People who accept payment in cash only will be affected.
This scheme may have many advantages and some disadvantages but this step is required to make our country free from Fake currency, Black money, Corruption and money laundering which has been tormenting India for many years. So these are some benefits and drawbacks of demonetization on 500 or 1000 Rupees Notes.