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Finance minister has said that demonetisation along with increased digital transactions and the reduced cash usage in the informal economy has led to a reduction in currency in circulation by ₹3.4 lakh crore.
The Government has also said that fake note circulation has also dropped.It quoted RBI reports which said that the number of counterfeit notes detected in the banking system has come down to 3.17 lakhs pieces in FY19 from as high as 5.22 lakhs pieces in FY18.
Further,the digital transactions in terms of value has increased to 188 lakh crore in September 2018 from ₹112 lakh crore in November 2016.In volume terms,they increased to ₹241.88 crore from ₹91.83 crore in the same period.
Demonetisation also had a significant positive impact on curbing violence since illegally held cash which forms the major chunk of terrorist funding and most of these cash held by terrorists turned worthless post demonetisation.
Demonetization is the act of stripping a currency unit of its status as legal tender.In 2016,the Indian government decided to demonetize the 500 and 1000 rupee notes, the two biggest denominations in its currency system.
The objectives of Demonetization were (a)To fight black money and corruption in the country by preventing hoarding of cash (b)To fight terrorism by cutting off funding in cash and (c)To prevent counterfeiting of currency notes.Other objectives like transition toward a less-cash economy or push for digital transaction were added later by the Government.
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