The document discusses the Indian government's decision to demonetize Rs. 500 and Rs. 1000 currency notes. It provides background on the increase in fake currency and black money fueling corruption. The government aims to curb these issues by removing the higher denomination notes from circulation. While this creates short-term hardship, the long-term goals are to bring transparency, reduce corruption, and benefit ordinary citizens and the economy. The impacts on various sectors and pros and cons are debated.

3. Content
 Need of the study
 Introduction
 Why this move has been taken
 About Demonitisation
 Under this Scheme
 Impact on various Sector
 Pros and Cons
 Conclusion
Bibliography

4. Need of the study
 To know the motive behind this move.
To know the reason as to why this
step has been taken by the government.
 To know it’s impact on Indian
Economy in long run.
 To know it’s pros and cons.

5. Introduction
In an important move, the Government of India declared
that the five hundred and one thousand rupee notes will
no longer be legal tender from midnight, 8th November
2016. The RBI will issue Two thousand rupee notes and
new notes of Five hundred rupees which will be placed
in circulation from 10th November 2016. Notes of one
hundred, fifty, twenty, ten, five, two and one rupee will
remain legal tender and will remain unaffected by this
decision. This move is expected to cleanse the formal
economic system and discard black money from the
same.

6. In a bid to cut corruption, the Prime Minister
of India, Mr. Narendra Modi has announced
the ban on Rs. 1000 and Rs. 500 currency
notes.
What is being an unpredictable move by
Modi, he announced during his special
address to the nation that the currency notes
of Rs. 500 and Rs. 1000 will be illegal
starting mid night of 8th of November 2016.
"Currency notes of Rs 1,000 and Rs 500 will
be just paper with no value, " announced by
PM Modi.
WHY THIS MOVE ??

7. •This move from the Indian
Prime Minster is his strike
against the ever increasing black
money in our country.
• While this announcement was
met with shock and confusion by
many, there are others who
termed this as the Surgical
Strike on Black Money.
• Let us have a look at the
reasons for the ban and how this
can affect our economy going
forward.

9. • India has seen the increase in
the fake currency notes of
higher denomination circulated
widely.
• For all those ordinary people, the fake notes
look much similar to the genuine ones even
when the security feature is not copied.
• Such fake notes are used for illegal and
anti- national activities.
• The currency notes of high denomination are
used by terrorists and to hoard the black
money into our nation.

10. CONTINUED........
• As the economy of India is cash
based, such circulation of fake
currency notes has become a menace.
• So, to contain the increase in fake
notes and black money, the scheme to
ban Rs. 500 and Rs. 1000 currency
notes has been introduced by the
government.

11. UNDER THIS SCHEME
As per this scheme the legal
tender character to the
currency notes in Rs. 500 and
Rs. 1000 denominations are
withdrawn.
• Due to this, the old high
denomination notes are
invalid and cannot be used
for any transactions nor can
be stored as a value for use
in the future.

12. These notes can now be exchanged for the same
value of money at the RBI offices or at various
bank and post offices.
People can deposit their old currency till the 30th of
December 2016 in their respective bank accounts.
• Most of the ATMs across the nation are closed on
the 9th and 10th of November and the withdrawal
limit from the 11th of November is Rs. 2000 and the
same would be increased to Rs. 4000 per day.
CONTINUED.....

14. While the decision taken by the government was
indeed a bold one, both the bankers and
economists do feel that this ban would for sure
have a ripple effect on both gold and real estate
transactions as these are the instruments that
are used by majority of individuals to hoard the
black money they have.

15. • Share markets will for sure see the impact
with the prices of the shares shooting higher. A
negative impact can be seen on the cash
focused sectors in the stock market. This can
trigger to all round selling bringing down the
indices from their present levels.
• This move will also impact and lower the
political spending during elections especially in
states like Punjab and UP where huge cash is
spent during elections.

16. WHAT’S GOOD ABOUT
THIS MOVE ??

17. •First, people who have a lot of cash, legally
earned, will deposit it in the bank.
•Credit (loans) will become easier and interest
rates may come down. More loans given out
increases broad money supply and creates
inflation.
•On a long-term basis the government’s decision
to curb black money would reduce corruption and
bring transparency into the sector.

18. Continued….
•The move will benefit the poor, middle class
and aspirational middle class by increasing
opportunity and bringing real estate and higher
education within their reach again.
•The government’s move will benefit companies
in the cashless economy.
•Rupee will strengthen as the time passes.
Inflation will go down which will benefit poor
and middle class people.
.

19. CONTINUED…
•Investments in gold and Jewellries will increase as trust
on currency will go down.
• More people will try to convert paper into gold. It will
eventually increase investment in the government’s gold
monetization scheme.
•More and more businesses will be organized those who
accept paper money only such as small jewelers, hotels
etc.
Funding for arms, smuggling, terrorism will take a blow.
This is most important advantage to the country.

20. Who will be affected
by this move?

21. •The lower/middle class will not find it tough to account
for or exchange the currency.
•The real fear will be for those who have unaccounted
money.
•Land and property prices, particularly those of luxury
homes, are likely to come down in the short to medium
term as a result of this move.
•The demand for gold and other investment options such
as diamonds and silver may shoot through the roof until
the deadline, and beyond it.

24. What RBI and world bank says about
Indian economy.!
In the last two and a half years with the
support of 125 crore Indians, India has
become the “bright spot” in the global
economy. It is not just we who are saying
this; it is being stated by the International
Monetary Fund and the World Bank.

25. Conclusion
The government’s move is bold in its intent and
massive in its measure. While the intent is clear,
the implementation and impact is yet to be seen.
One thing is sure though – the Indian economy
just had a massive disruption overnight.

26. PM’S ADDRESS THE NATION
“Let us ignore the temporary hardship
Let us join this festival of integrity and
credibility
Let us enable coming generations to live
their lives with dignity
Let us fight corruption and black money
Let us ensure that the nation’s wealth
benefits the poor
Let us enable law-abiding citizens to get
their due share.

27. Bibliography
 http://www.insightsonindia.com/2016/11/09/insights-
editorial-rs-500-rs-1000-notes-no-longer-legal-tender/
http://www.pmindia.gov.in/
thewire.in/78694/paper-money-ban-rs-500-rs-1000-notes-
explained/
www.insightsonindia.com/.../6-discuss-demonetization-rs-
500-rs-1000-notes-impact-t..
http://finmin.nic.in/press_room/2016/press_cancellation_high_
denomination_notes.pdf
http://finmin.nic.in/