POSITIVE IMPACTS OF DEMONETIZATION IN INDIA (2016)

The demonetization has brought many changes in the economy and impacts the Indianeconomy and especially the issues for which it has been undertaken by the Government Of India.

1.) BLACK MONEY –

The government has estimated that around Rs.5 lakh crore would be removed from circulation permanently. But, according to RBI report for the year 2017-2018, more than 97% of Rs.500 and Rs.1000 banknotes i.e. around 15, 311 lakh crore out of 15, 418 lakh crore  have been recovered and deposited with the banks. Only a little amount of banknotes have not been recovered and deposited with the banks.

2.) TAX COMPLIANT SOCIETY –

There is an increase in direct tax collection by 25% i.e. around 12 lakh crore in year 2017-2018 as compared to previous year 2016-2017 from 9 lakh crore.

INCOME TAX FILINGS

Year	Filing Of Income Tax Return	New Return Filers	Corporate Returns
2015-2016	4.7 cr	66.2 L	7.5 L
2016-2017	5.5 cr	85.5 L	8 L
2017-2018	7.0 cr	1 cr	9.3 L

Also, according to various reports there is an increase in income tax filings by 21% i.e. from 5.5 crore in the year 2016-2017 to 7 crore in the year 2017-2018. There is an increase in corporate returns by 17% i.e.  from 8 lakhs in year 2016-2017 to 9.3 lakhs in year 2017-2018. Also voluntary tax payments under Advance tax payments increased by 23% in the year 2017-2018.

3.) COUNTERFEIT CURRENCY –

Denomination wise counterfeit notes detected in banking system

Denomination	2015-2016	2016-2017	2017-2018
2 and 5	2	80	1
10	134	523	287
20	96	324	437
50	6,453	9,222	23,447
100	221,447	177,195	239,182
200	-	-	79
500(MG series)	261,695	317,567	127,918
500 (New design)	-	199	9,892
1000	143,099	256,324	103,611
2000	-	638	17,929
TOTAL	632,926	762,072	522,783

SOURCE : RBI

After the demonetization the counterfeit currency was badly hit and there is a fall in these fake and illegal Indian currency notes. There is a fall in counterfeit notes of Rs.500 from 3,17,567 in year 2016-2017 to 1,27,918 in year 2017-2018 and counterfeit notes of Rs.1000 from 2,56,324 in year 2016-2017 to 1,03,611 in year 2017-2018. But the counterfeit notes of Rs.500 (Mahatma Gandhi New series note) increased from 199(2016-2017) to 9,892(2017-2018) and of Rs. 2000 notes increased from 638(2016-2017) to 17,929(2017-2018).

4.) TERROR FUNDING –

The demonetization leads to fall in terror funding as there are less fake notes and less counterfeit notes. So as a result the stone pelting incidents fall to 73 in November, 2016 and 36 in December, 2016 and also demonetization leads to fall in many other terror attacks in India due to non availability of cash or the demonetized notes has lost their legal tender.

As per various reports it is found that the stone pelting incidents were higher prior to demonetization and after demonetization these incidents started falling due to scarcity of cash, no more fake notes of Rs.500 and Rs.1000 and also the Rs.500 and Rs.1000 have lost their legal existence and significance.