On 8th November 2016, Prime Minister of India Mr. Narendra Modi took a radical monetary step in which a currency of Rs.500 & Rs.1000 denomination notes will be considered alleged invalid or obsolete from 30th Dec 2016. The process of demonetization is called into play to buckle down the dreadful effects of corruption, black money, fake notes & terrorism. It is not the first time Central Government has taken this harsh step in the country. It was first implemented in 1946 when the Reserve Bank of India demonetized Rs.1000 & Rs.10, 000 notes. The government then brought the higher denomination banknotes i.e. Rs.1000, Rs.5000 and Rs.10, 000 in a fresh avatar eight years later in 1954 before the Morarji Desai government again demonetized these notes in 1978, yet again. The step taken by central government will not only fight against corruption & black money in market but will also eliminate fake currency that are pumped into the economy each year which is being used by terror groups to fund terrorism in India. According to the previous study done by National Investigation Agency (NIA), it has been reported that the fake currency is pumped in through the land route of Bangladesh. Manufactured in Pakistan, it reaches Bangladesh through air and sea route. An organized group then pushes the money into India through the porous border areas. The whole idea of Demonetization is to curb the parallel black economy, which exists, and have grown deep roots in the Indian Economy over the last 70 years. Demonetization aims to lower down the cash circulation in the country. The move is estimated to scoop out more than Rs.15 lakh crore of black money from our economy. It will eliminate fake currency and dodgy funds, which have been used by terror groups to fund terrorism in India.
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