The government of India announced Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the midnight of November 8, 2016. As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender from that date. New currency notes of the denomination of ₹ 500 and ₹ 2,000 were issued by Reserve Bank of India after the announcement.
The step resulted in a substantial increases in the awareness about and use of Point of Sale machines, e-wallets, digital cash and other modes of cashless transactions. Also, increased transparency in monetary transactions and disclosure led to a rise in government revenue in the form of tax collection.
a. Enumerate the dimensions of business environment highlighted above.
b. State the features of Demonetization.
The step resulted in a substantial increases in the awareness about and use of Point of Sale machines, e-wallets, digital cash and other modes of cashless transactions. Also, increased transparency in monetary transactions and disclosure led to a rise in government revenue in the form of tax collection.
a. Enumerate the dimensions of business environment highlighted above.
b. State the features of Demonetization.a. Dimensions of business environment highlighted above are:
- Political dimension: 'The government of India announced Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the midnight of November 8, 2016. '
- Legal dimension: 'As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender from that date.'
- Technological dimension: 'The step resulted in a substantial increases in the awareness about and use of Point of Sale machines, e-wallets, digital cash and other modes of cashless transactions.'
b. Features of Demonetization are:
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Measure of tax administration- black money holders had to declare the unaccounted wealth and pay taxes at penalty rates
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Measure to avoid tax evasion- indicating the government will not tolerate tax evasion
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Measure of channelizing savings into the financial system- by depositing money in banks
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Create ‘cash-less’ or ‘cash-lite’ economy- for increasing financial savings and reducing tax evasion
- Political dimension: 'The government of India announced Demonetization of ₹ 500 and ₹ 1,000 currency notes with effect from the midnight of November 8, 2016. '
- Legal dimension: 'As a result, the existing ₹ 500 and ₹ 1,000 currency notes ceased to be legal tender from that date.'
- Technological dimension: 'The step resulted in a substantial increases in the awareness about and use of Point of Sale machines, e-wallets, digital cash and other modes of cashless transactions.'
-
Measure of tax administration- black money holders had to declare the unaccounted wealth and pay taxes at penalty rates
-
Measure to avoid tax evasion- indicating the government will not tolerate tax evasion
-
Measure of channelizing savings into the financial system- by depositing money in banks
-
Create ‘cash-less’ or ‘cash-lite’ economy- for increasing financial savings and reducing tax evasion
