Impact of Demonetization

 1)- Money or interest rates- Demonetisation has lead to the following changes:

  • Decline in cash transactions.
  • Bank deposits increased.
  • Increase in financial savings.
2)- Private wealth- There was found declination in private wealth since some high demonetised notes were not returned and real estate prices fell.

3)- Public sector wealth- There is no effect on the wealth of the public sector due to demonetization.

4)- Digitisation- Digital transactions amongst new users (RuPay/AEPS) increased since one of the objectives of demonetization is to move towards a cashless economy.

5)- Real estate- Due to demonetization, prices had declined.

6)- Tax collection- Rise in income tax collection because of increased disclosure due to demonetization.

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