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Effect of Demonetization-On November 8, 2016, India’s prime minister, Narendra Modi, declared that all 500- and 1,000-rupee notes, making up 86% of the cash circulation in India, could no longer be used. This demonetization initiative caused a sudden breakdown in India’s commercial ecosystem. Trade across all sector of the economy was disrupted with this demonetization.
The aim of this demonetization was to eradicate the black money which was in three forms:
Money that is stashed in abroad.
Money that is in the country but in higher value currencies i.e Dollar, Pounds, etc
Money stashed under the mattress or somewhere else to avoid tax.
Demonetization will likely result in people adopting virtual wallets such as Paytm, Ola Money, BHIM, UPI etc. With this new policy, people have started going cashless. Paytm, BHIM, UPI, Ola Money and other similar apps are on the rise. Use of these apps is increasing significantly over time. This behavioral change is a game changer for India in the world of digitization.
The Internet on the mobile initiative is helping people to fulfill their dreams. The best part is that government thought first for the development of rural areas in the field of education, their living style and also to provide employment. Through the digital India initiative, we can promote technological application in the rural area of India, which would be the most important step towards the development. There will be transparency in government functioning areas which will edge the corruption. In an era where everything is linked to the Internet, we need to get digitized if we want to match our footprints globally.