There will be added replacement costs of currency


There will be added replacement costs of currency.
Increased cost of operating ATM s need to be refilled ‟
more often and also it will be a huge burden on banks.
Moreover disruption of old currency units and printing of
new currency will involve costs,
which has to be borne by
government and if costs are higher than the benefits then
there is no use of demonetization
VII.
LONG
-
TERM
IMPACTS OF DEMONETIZATION ON
INDIAN ECONOMY
POSITIVE IMPACTS

Government revenue will boost up as more earnings will
be declared.

Collection of higher taxes will help in nation building like
development of roads, infrastructure, transportation and
many others.

People who have opened Jan Dhan accounts under the
Prime Minister Jan Dhan Yojna, can now deposit their
cash under this sche
me and this money can be used for
implementation of national developmental projects which
will demand more labor and other skilled
manpower

which
will give rise to employment opportunities.

Cash in system will boost educational loans and business
loans
thus bringing more opportunities.

Substantial increase in the demand of digital transactions,
E
-
Wallets, usage of plastic money, online transactions
using E
-
banking etc.
NEGATIVE IMPACTS

Demonetization itself will not fight black income. The
most important
policy should be tax administration where
the tax authorities can monitor expenditure and matching
it with income of the respective individuals.

Professor Arun Kumar, Jawaharlal Nehru University, is of
the view that demonetization is no silver bullet agai
nst
fake currency. Fresh printing and import of counterfeit
currency will not stop with demonetization.

Though Digitization may be a positive effect of
demonetization, India to become
cash
less economy will
take time. Bloomberg data shows
the share of cash
in the
volume of consumer transactions is 98% and much of the
cash transactions are in rural India. PwC Report showed
that India s unbanked population still stood at 233 ‟
million, suggesting that much remains to be done before
people can be on boarded on t
o the digital bandwagon.
VIII.
CONCLUSION
It may be right to say that demonetization will prove to be
beneficial for Indian economy in long run. The impact of
currency swap on country s tax structure would be felt in ‟

years to come. Government revenue will increase in the form
of increased tax coll
ection, bank deposits will increase leading
to lower interest rates on loans,
and government
can
channelize this increased revenue towards implementation of
projects of National importance. Further the funding to illegal
or unlawful activities which arise
due to unaccounted cash
flow will reduce. Government can now easily track unreported
income resulting in reducing of corrupt practices and money
laundering. But it is also to be noted that the ultimate objective
of demonetization to flush out black money f
rom the economy
may not be achieved, until the actual people behind
black
money are targeted. Moreover, people have invested their