Cashless and Digital India: A Move Towards Clean Economy

The present study discusses about the valorous step Demonetization taken by the Government of India. The major issues in India are corruption and Terrorism and the root cause of these issues is black money, which is the major cause for deprivation of the nation. There was a need to unearth audacious step to tackle the various issues regarding black money, corruption and terrorism. The central government of India has decided the Demonetization of Rs.500 and Rs.1000 currency notes on 8th November 2016. However, 87% of total currency was constituted by these notes, being the reason for scrapping of these high denomination notes as legal tender. The current research is based on secondary data assembled from different sources. The present study makes an attempt to study the history of demonetization in different countries and point out the overall consequences of Demonetization and its inferences for sustainable development of the country.


INTRODUCTION
Demonetization is the action of discontinuing a money unit as a legal tender. Demonetization of money means withdrawal of a particular currency from circulation and replacing it with the new currency. To remove black money curse from the society, the Indian government has bring a major alteration in the economic system by demonetising Rs. 1000 and Rs. 500 notes. These halted to be legal tender from mid night of 8 th November 2016. Individuals have given time till 30 th December 2016 to exchange the money held by them. The reasons given in support of this bold step are to restrain @ IJTSRD | Available Online @ www.ijtsrd.com | Volume -2 | Issue -5 | Jul-Aug 2018 The present study discusses about the valorous step Demonetization taken by the Government of India. The major issues in India are corruption and Terrorism and the root cause of these issues is black the major cause for deprivation of the nation. There was a need to unearth audacious step to tackle the various issues regarding black money, corruption and terrorism. The central government of India has decided the Demonetization of Rs.500 and rrency notes on 8th November 2016. However, 87% of total currency was constituted by these notes, being the reason for scrapping of these high denomination notes as legal tender. The current research is based on secondary data assembled from ces. The present study makes an attempt to study the history of demonetization in different countries and point out the overall consequences of Demonetization and its inferences for sustainable money, Economy, Demonetization is the action of discontinuing a money unit as a legal tender. Demonetization of money means withdrawal of a particular currency from circulation and replacing it with the new To remove black money curse from the society, the Indian government has bring a major alteration in the economic system by demonetising Rs. 1000 and Rs. 500 notes. These halted to be legal November 2016. December 2016 to exchange the money held by them. The reasons given in support of this bold step are to restrain counterfeit notes which are contributing to terrorism and to eridicate black money. There were broadly to main objectives of Demonetization first, removal of black money and other attacking on black money. The first objective has been achieved by one stroke i.e., Demonetization of high denomination notes of the country and realising new money of Rs.2000, Rs. 1000 and Rs.500. The objective attacking black money has begun.

OBJECTIVES OF THE CURRENT STUDY
The basic objectives behind this research are 1. To understand the situation of black money in Indian 2. To examine the history of Demonetization in India and in other countries 3. To assess the need for Demonetization 4. To investigate the overall effect of Demonetization on Indian economy

RESERCH METHODOLOGY
The Present research study conducted is descriptive in nature. The data for the current research has been collected from secondary sources such as journals, newspaper, magazines, annual reports, periodicals, documents and from various websites. The current research focuses mainly on the 8 Demonetization need and its impact for sustainable development of the country.

REVIEW OF DEMONETIZATIONIN THE PAST
Economic transformational events are very rare. In Indian economic history, Demonetization is the biggest event so far. This section of the paper discusses about past Demonetization in India and also Similarly, the circulation of Rs. 1000 notes has increased 24.5% from 508 crore to 633 crore during the same period. The currency notes together taken a jump of 33.6% over the period of two year. However, as a percent of total currency share, in circulation has hiked from 14.7% to 17.4%, whereas Rs.1000 note was at 6.6% in march 2014 and stood 7% on 31 st st march 2016, Rs.1000 and Rs.500 notes together reported for h is 86.4% of total value. There was an increase from the past fiscal year 2014 as the accounted value for these denominations was 10.8 lakh crore which is 84.1% of the total value. To become corruption free, the cash circulation needs to op funding of terrorism and unlawful activities fake currency needs to be eliminated. There were side effects of the Demonetization such as there was shortage of currency for common man and caused huge inconvenience. It has deeply affected the ere was no work for daily wagers, their income stopped as employer were not able to pay their wages because of shortage of currency in the markets. The government of India has given these reasons behind demonetisation of high denomination notes Rs. 500 and Rs. 1000.

INFLUENCE OF DEMONETIZATION ON INDIAN ECONOMY
There are both Long term and Short term effect of Demonetization like

Influence on Parallel Economy
The removal of Rs. 1000 and Rs. 500 notes and replacement of the same with new 500 and 2000 currency notes is anticipated to discard black money from the economic system as they will be obstruct the proprietor will not be able to deposit the same in the banks. Temporarily restraining the distribution of huge volume of counterfeit money, it would limit the funding for antisocial elements like terrorism, smuggling, espionage, etc.

Influence on Money Supply
With the older 1000 and 500 legal tenders notes be removed, till the new 500 and 2000 Rupees notes get widely distributed in the market, money supply is assumed to reduce in the short run. To the extent that black money does not re-enter the financial systems, reserve money and hence money supply will permanently and gradually as when the new notes gets distributed in the market, the mismatch gets corrected, money supply will be balanced and increased.

Influence on Demand
The overall demand is expected to be affected to an extent. The demand in following sector is to be influenced particularly: customer goods, Property and Real Estate, Gold and luxury goods and Automobiles income stopped as employer were not able to pay their wages because of shortage of currency in the markets. The government of India has given these reasons behind demonetisation of high denomination

INFLUENCE OF DEMONETIZATION ON
There are both Long term and Short term effect of

Influence on Parallel Economy
The removal of Rs. 1000 and Rs. 500 notes and replacement of the same with new 500 and 2000 currency notes is anticipated to discard black money from the economic system as they will be obstruct the proprietor will not be able to deposit the same in the anks. Temporarily restraining the distribution of huge volume of counterfeit money, it would limit the funding for antisocial elements like terrorism, With the older 1000 and 500 legal tenders notes being removed, till the new 500 and 2000 Rupees notes get widely distributed in the market, money supply is assumed to reduce in the short run. To the extent that enter the financial systems, reserve money and hence money supply will reduced permanently and gradually as when the new notes gets distributed in the market, the mismatch gets corrected, money supply will be balanced and The overall demand is expected to be affected to an n following sector is to be influenced particularly: customer goods, Property and Real Estate, Gold and luxury goods and Automobiles Page: 844 (only to a certain limit). All these mentioned sectors are expected to face certain moderation in demand from the consumer side, owing to the significant amount of cash transactions involved in these sectors.

Influence on Prices
Price level is presumed to be lowered due to restrain in demand side. Costumers Goods: Prices are assumed to decline only marginally due to reduction in demand as use of cards and cheques would reimburse for some purchases. Property and Real Estate: Prices in this area are largely assumed to decline, specially for sales of properties where huge part of the transaction is cash based, rather than banks transfer or cheque transactions.

Influence on GDP
The GDP formation would be influenced, with reduction in the consumption demand. Gradually with the recent increase in festival demand is assumed to offset this decline in overall effect. However, this presumed effect on GDP may not be remarkable as some of the demand will only be delayed and re-enter the stream as the cash circumstances becomes normal.

Influence on Online Transactions and Alternative Means of Payment:
The cash business affairs facing a decline, alternative methods of payment will see increase in demand. The E-Wallets and Apps, digital transaction methods, Online Business Transactions methods using E Banking, employment of Plastic Money (debit and credit cards), etc., are considerableincrease in demand. This will bring more transparency in system and can track online money transactions easily.

CONCLUSION
The short-term pains from demonetization, the long queues before ATMs, pensioners waiting for long to draw pension, inconveniences to people who had withdrawn money for weddings, impact on trade, disruption of economic activity etc., have been huge. But the long-term benefits are likely to be substantial. Demonetization has straight away eradicated most of the illegal cash distributed since several years in the system. The counterfeit money distributed in the nation has ceased to be of any value. Demonetization would curb the menace of corruption and terrorism as the existing black money was responsible for promoting the same. This move would bring back huge money outside the system back into the economic system which can be further used by the banks for lending purposes and for commercial activities. This would helps not only increase the profitability of banks, but also makes a way for reduction of interest rates. Further, in due course of time, significantly helps in improving tax collections as public would prefer to deal in transparent transactions by paying legitimate taxes. Last, but not the least, Demonetization, can significantly improve Indias globally as the nation which respects law and where businesses can prosper and grow through legitimate means making way for large scale ventures and developments both from within the country and outside the country. With these implications, it can be inferred that Demonetization is perhaps the biggest surgical strike on black money since Independence. This is also another milestone in Swachh Bharat Abhiyan, though in a different sense.