DMPQ: What were the objectives of Demonetisation? What were the positive effects?

On 8th Nov, 2016 86% of the currency in circulation was declared as not legal tenders.


The stated objective of demonetisation was :

  • Reduction of black money
  • Achieving lower cash/ gdp ration
  • An attack on fake currency
  • To stop terror financing
  • Increasing digital transactions
  • Increasing tax net


Positive effects of  Demonetisation are as follows:


  • The number of tax fillers have increased.( Additional 9 million)
  • The transactions made amounting to Rs 3 lakh crore are under Income tax deptt. Vigilance
  • Over 2 lakh shell companies have been deregistered.
  • Demonetisation has able to put a hold on unregulated Real estate sector .
  • Anonymity with the cash transactions is reduced.
  • The whole process has brought more accountability.
  • Formalisation of economy- a step toward


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