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Home >> News >> Profit & Loss of Demonetization, Why Common People Must Know the Impact

Profit & Loss of Demonetization, Why Common People Must Know the Impact

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IndiaNewsonWeb: 08 Nov, 2017, On November 8, 2016, the Central Government announced demonetization on a year ago. Today, when one year is complete, it is necessary to know that after the independence, what was achieved after the biggest decision related to people's pocket? This is also important because only a decision from the government was made by the common man in the long queue to withdraw his own money from the bank. In this queue where some people lost their lives, in many homes, such events like marriage and marriage became difficult. For the first few weeks, it seemed as though the world's fastest running economy has collapsed.

Some Facts related to Demonetization

1. According to many independent agencies, about 20 percent of black money was in cash while the rest were in the shape of real estate and jewelery. Although there was a possibility of black cash and even less.

2. The demonetization only damages those who had deposited their black money in the form of cash at the time of demonetization.

3. 80 percent of the currency in which the currency was in the country became useless from the demonetization. Most of India's trade and expenditure is in big notes. Therefore, to change the notes, banks had to go to other exchange centers.

4. India's 11.8 percent economy runs on cash the ratio of cash to India's GDP is more or less equivalent to many big economies. The ratio of cash to Germany's GDP is 8.7 percent, while in France it is 9.4 percent. Japan has 20.7 percent economy cash.

5. There is a complex combination of black and white transactions in the cash economy. The cash earned through illegal means is also used to generate productive assets and demand.

Understand Cash Economy

There are two types of cash in the cash economy. An accountant or declared and second unaccounted. Only two accounts are authorized under the rules. The cash can become legal only when it is either an account of the tax account or a bank account. Any cash out of these two accounts will be called unaccounted.

Full Record by RBI

Whatever the speculation about the size of the economy of black money, but as far as the cash economy is concerned, the Reserve Bank of India records and records well in every quarter. Since the RBI keeps records of each of the notes printed, hence the figure of these circulation of money is calculated by the cash economy.

Account of Profit-Loss

After one year of pain, the country is restless to know what the benefits of this sacrifice are?. According to the Reserve Bank data, till March 2016, there was a circulation of Rs 14 thousand 180 billion in circulation in 500 and 1000 notes in India. Out of this, 30 per cent i.e. cash of Rs 4,254 billion was with banks and other government agencies, whereas 70 per cent i.e. 9,926 billion was with the general public (Money with Public).

It is worth noting that after the similar decision in 1978, 75 percent of the money returned to the central bank treasury. While the remaining 25 percent of the cash was out of the economy. That was 25 per cent blacklisted at that time and this was the benefit of the government with its decision.

This time, people who had cash of Rs 9.9 lakh crore before the ban, had estimated that only Rs 7-8 lakh crore would be returned to the banks and the remaining cash would remain out of the system as a black money. But the latest data released by the RBI turned the hopes back on, and almost all cash deposited by the public was deposited back in the banks.

It is worth mentioning that after the return of full cash the Reserve Bank was hoping for the profits, then the water went again. It was believed that the Reserve Bank could give this additional income as a dividend for the government's investment. But the RBI data reversed this expectation of the Central Government. 

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