Demonetization was a process adopted by the government to eliminate many issues that have been challenging governance since time immemorial, such as black money, terrorist financing and counterfeiting of fake goods. cash. By adopting such a sudden and rapid measure of declaring Rs 500 and Rs 1000 notes illegal, the government thought of removing these obstacles. Various short, medium and long term benefits were expected. Say no to plagiarism. Get Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get Original EssayDemonetization, a campaign to reduce black money from the economy, was partly successful and partly not. The brighter side of demonetization consists of: DIGITALIZATION: Indians responded quickly to the change and within days, various online methods like e-wallet and mobile wallets, private players like Paytm, as well as the government . systems like Rupay, BBPS and Paytm have been used frequently. CURBING BLACK MONEY: The fact that Rs.1000 and Rs.500 notes were found floating in rivers and drains shows to what extent black money has been curbed. CONTROLLED INFLATION: Inflation was controlled because a huge amount of money was extracted from the economy. Real estate rates will plunge, which will be beneficial for the middle class and other migrants who are entering and are unable to purchase homes due to such high property prices. The government expects such things to happen, but some of its expectations have backfired as fake currencies have started to seep into the economy, showing that the new security features of currencies have been compromised. The main reasons for the increase in counterfeit currency are multiple: poor border surveillance, which has led to the increase in counterfeit currency smuggled from Pakistan and Bangladesh, corruption among public officials which has led to easy distribution, storage and printing of counterfeit currencies. , Easy access to cash and increased withdrawal limits, people involved in printing fake currency had enough time after November 8 to start printing again, political financing requires huge sums of money , so in this case counterfeit currency can easily enter into circulation, funds of various terrorist activities like naxalism, terrorism or cross-border smuggling, drug or human trafficking across borders, financing of various NGOs, money coming from tax havens or P notes and the lack of mass awareness of the security features of the new currency. people were used by the rich to deposit money into their accounts, thus the rich avoided penalties and were able to keep their income undeclared. There was UNCONTROLLED BLACK MONEY ABROAD because the black money kept in foreign tax havens, in the form of gold, could not be controlled. 'will not be tapped. In addition, the international position of the Indian economy is experiencing a significant setback. If we look at the agricultural sector in rural areas, we find that farmers generally use cash in most of their transactions and India is also largely a cash economy. Cash transactions in this rural economy are much higher than the total number of electronic transactions carried out daily. Moreover, in the tribal areas, the poor, through middlemen, makeexchange their currencies at higher rates due to unavailability of information and helplessness. a burning issue in the debate regarding the effect on the national economy. However, in today's era of globalization, a nation's domestic policies have a domino effect on other economies. Nepal – Most Affected: Daily transactions with India in INR for its necessary supplies, and shortage of new currencies have caused shortage of essential commodities and affected India. -Nepalese trade. It also requires INR for international trade with other currencies, but has banned all financial transactions in Indian rupees and called the new notes "unauthorized and illegal." Lack of reliable information -> The Nepalese government is unsure of the amount of INR currency its citizens hold (especially in informal areas) and the ability to exchange them. Would be a daunting task in the short term (depending on The Nepali Rashtra Bank ~ INR 35 million in 500 and 1000 rupee notes are present in its formal financial network. Security concerns also existed as the RBI was reluctant to freely provide foreign exchange due to the possibility of their unscrupulous use. (terrorism – used by ISI, generation of black money) Bhutan – Bhutanese currency is not much affected It is pegged to Indian currency at a ratio of 1:1, and Indian currency is legally tradable in. Bhutan, and the Central Bank of Bhutan offers at least hassle-free currency a lot of hoarding (also better synergy with RBI, government), but short term shortage would occur by Indian travelersProblems for Bangladesh and Myanmar: allow the use of the rupee as a parallel currency due to their confidence in India's financial strength and political stability, but the decision has shaken them. It has affected small and marginal traders (border chapats) along the length of the country. the most borderline is the one that generally trades in INR Cash. Bangladeshis and SLs visiting India for medical purposes were facing major problems in arranging INR funds and getting stuck with older and high value notes. This has hit extremists hard, especially in Myanmar, as the currency they have hoarded for so long has become nothing more than a coin. paper of zero value.Pakistan - Major blow to its Na-pak iraade: As it reduced the smuggling of goods/arms and terrorist activity in Kashmir region due to non-availability of new currency to finance their motives odious and also manufactured the counterfeit note The printing press maintained by the ISI was worthless and thus the financing of terrorism suffered a huge setback. Marginal appreciation of the currency due to elimination of black money and counterfeit currency from the formal system would increase the cost of goods imported from India to some extent. This would also lead to a push towards gold in these (safe haven) economies. In the short term, demonetization would certainly affect the broader economy of neighboring countries to some extent, and the move is also seen as against the principles of the “Neighborhood First” policy. . Also, the government. In these countries, they would now be cautious about free trading of INR and might instead push for the use of their own currencies. One of the main objectives behind the demonitization movement was to counter the menace of counterfeit currency that was plaguing the country's economy and being used for financing terrorism. Key actions taken to resolve the problem: Improve.