Benefits of Demonetization

8th November 2016 was the day last year when the entire country was seeing a very bold step by any of the Prime Minister till date. Yes you guessed it right!!! We are seeing the 1^st anniversary of iconic decision called Demonetization.

A year has gone by since the decision on demonetization was made. Prime Minister Narendra Modi announced on November 8 2016 in an address to the nation that the Rs 500 and 1,000 notes would no longer be legal tender.

Let’s look at some of the benefits. The Prime Minister's Office has provided some data to show the benefits of this decision which is probably one of the biggest since independence.

1. Highest ever black money unearthed

• India unearthed its highest ever black money which values of lakhs of crores. Above picture represents various areas from where the black money was brought back into the main stream economy

2. Unprecedented increase in tax compliance

• The number of new tax payers shot up 66.53 lakh in the last year to 84.21 lakh after demonetization and number of e-returns filed got increase to 3.01 crore from 2.35 crore which is a whopping 27.95% jump.

3. Decisive blow to Terrorism and Naxalism

• Incidents of stone pelting in Kashmir came down by 75%.
• Incidents of Left Wing Extremism decreased by more than 20%
• 7.62 lakh pieces of counterfeit currency notes were confiscated

4. Massive cleansing of India’s Financial System

• 2.24 lakh shell companies struck off. Demonetization dealt a blow to shell companies. A company with negative opening balance as on Nov 8 2016 deposited and withdrew Rs 2,484 crore post demonetization

5. Digital Payments receive significant boost

• More than 13 lakh POS machines were added in 1 year as compared to existing 15 lakh machines which were being used since the first implementation

• Increased mobile wallet transactions. Demonetization paved the way for increased digital payments which increased the usage to 69% in terms of volume from Rs 7.07 crore to whooping Rs 22.54 crore

• The use of debit cards shot up considerably. In terms of value it’s a jump of 48% from Rs 18,370 crore to massive Rs 35,413 crore and increased over 50% in terms of volume

6. Loans got cheaper

• Real estate prices declined significantly and governing body RERA was introduced which imposed strict rules against the builders lobby benefiting the common people

7. Better jobs for the poor

• Huge Push towards Formalization Ensuring Better jobs for poor. Payments of wages Act was amended and payments were directly credited into their respective bank accounts

*Image sources - Whatsapp forward from some contacts