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Ten years on, demonetisation's stated aims remain largely unmet, data shows
ଖବରରେ କାହିଁକି?
86% of India's cash was banned in 2016: the demonetisation aims every GS3 answer must weigh
A decade after the 8 November 2016 note ban, cash usage is unchanged and fake-note detection is rising.
Why it matters: GS-3 core
What you need to know
2 ମିନିଟ
This Deepavali marks ten years since Prime Minister Narendra Modi announced the demonetisation of ₹500 and ₹1,000 notes on 8 November 2016, which together made up about 86% of the cash in circulation.
A decade later, data on cash usage and counterfeit detection suggests that some stated aims, such as curbing cash use and fake notes, remain largely unmet.
ଉତ୍ସ: Topper IAS editorial (PIB / The Hindu / Indian Express)
ମୁଖ୍ୟ ତଥ୍ୟ
Remember these
- Demonetisation was announced by PM Narendra Modi on 8 November 2016.
- ₹500 and ₹1,000 notes, about 86% of cash in circulation, lost legal tender status.
- Stated aims included curbing black money, cash use and counterfeit notes, and cutting terror financing.
- A decade later, data suggests cash usage is unchanged and fake-note detection is rising.
- The Supreme Court upheld the decision by a 4:1 majority in January 2023, with Justice B.V. Nagarathna dissenting.
ପ୍ରିଲିମ୍ସ · ମେନ୍ସ
How the exam will ask it
ପ୍ରିଲିମ୍ସ
- The 8 November 2016 demonetisation withdrew the legal tender status of ₹500 and ₹1,000 notes.
- Notes of ₹500 and ₹1,000 together made up about 86% of the cash in circulation at the time.
- Curbing counterfeit notes and reducing cash use were among the stated aims of demonetisation.
- The Reserve Bank of India issues currency notes and is the central bank that handles note withdrawal and replacement.
ମେନ୍ସ
GS Paper 3 (Indian Economy: money and banking). Issue: ten years on, cash usage and fake-note detection suggest the stated aims of the 2016 note ban are largely unmet. Policy: the objectives were curbing black money, counterfeits and cash dependence, with a push towards digital payments. Implication and way forward: judge the move on outcomes against stated aims, and strengthen counterfeit detection, formalisation and targeted enforcement rather than one-time shocks.
Quick recall
Answer before you reveal
Consider the following statements about the demonetisation announced in November 2016:
- It was announced on 8 November 2016.
- It withdrew the legal tender status of ₹500 and ₹1,000 notes.
Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
ଉତ୍ତର ଦେଖନ୍ତୁ
ଉତ୍ତର: C — Correct: Both 1 and 2 — Both are correct: the announcement came on 8 November 2016 and the ₹500 and ₹1,000 notes lost legal tender status. • 1 only — wrong: Statement 1 is true, but statement 2 is also true, so '1 only' is incomplete. • 2 only — wrong: Statement 2 is true, but statement 1 is also true, so '2 only' is incomplete. • Neither 1 nor 2 — wrong: Both statements are accurate, so 'neither' is wrong.
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