What is demonetization?

Demonetization refers to the process of discontinuing the use of certain currency notes from circulation and replacing them with new notes. It is a monetary policy action taken by governments with the aim of curbing illegal activities and corruption. Demonetization was first introduced in India in 1946, and the most recent occurred in 2016 when the Indian government announced the discontinuation of 500 and 1000 rupee notes, which accounted for around 86% of the country's cash in circulation at the time. The move was aimed at promoting a cashless economy, increasing tax revenue, and reducing black money circulation. However, the implementation of demonetization had far-reaching economic repercussions, resulting in a cash crunch, job losses, and a slowdown in economic growth.

This mind map was published on 20 May 2023 and has been viewed 202 times.