Economics with Insight

DEMONETIZATION INTRODUCTION:- There is a background to the current decision of demonetization of Rs 500 and Rs 1000 rupee notes. The government has taken few steps in this direction much before its November 8, 2016 announcement. As a first step the government had urged people to create bank accounts under Jan Dhan Yojana. They were asked to deposit all the money in their Jan Dhan accounts and do their future transaction through banking methods only. The second step that the government initiated was a tax declaration of the income and had given October 30, 2016 deadline for this purpose. Through this method, the government was able to mop up a huge amount of undeclared income. However, there were many who still hoarded the black money, and in order to tackle them; the government announced the demonetization of 500 and 1000 currency notes. The sudden announcement by the govt on the night of 8 th Nov. 2016 that currency of the denomination of Rs. 500 and Rs 1000 notes wou...

The objective of planning in India has been to achieve rapid and balanced economic development while addressing the country's social and economic challenges. India is a diverse country with a large population and varied economic and social conditions. Planning has been crucial in ensuring that the benefits of economic development reach all sections of the society . The planning process in India started with the adoption of the First Five-Year Plan in 1951. Since then, India has had a series of Five-Year Plans that have set targets for various sectors of the economy. The objective of these plans has been to accelerate economic growth, reduce poverty, increase employment, and improve the standard of living of the people.   Over the years, India's planning process has evolved to incorporate new challenges and opportunities. The planning process has been decentralized, with greater involvement of the states and local bodies. There has also been a shift towards a more market-orient...

T he rupee in your pocket has a mysterious past. Behind Mahatma Gandhi’s smiling face lies a long history of struggle, exploration, and wealth that can be traced back to the ancient India of the 6th century BC. Let’s demystify this history by bringing you the interesting stories about how Indian currency has evolved over the ages into the rupee of today. Ancient Indians were the earliest issuers of coins in the world, along with the Chinese and Lydians (from the Middle East). The first Indian coins – punch marked coins called  Puranas ,  Karshapanas  or  Pana  – were minted in the 6th century BC by the Mahajanapadas (republic kingdoms) of ancient India. These included Gandhara, Kuntala, Kuru, Panchala, Shakya, Surasena, and Saurashtra. Then came the Mauryas who punch marked their coins with a royal standard. Chanakya, prime minister to the first Mauryan emperor Chandragupta Maurya, mentions the minting of coins such as  rupyarupa ...

India is not a stranger to demonetisation as Prime Minister Narendra Modi recently marked the third time in history that currency notes have been demonetised in India. However, the recent currency ban of Rs 500 and Rs 1000 notes is the biggest currency ban in India’s history, making more than 80 percent of hard cash in circulation effectively worthless. As the country adjusts to the new currency norms, here is a list of other countries that attempted demonetisation, sometimes with not so successful results. Soviet Union In January 1991 under the leadership of Mikhail Gorbachev the country withdrew 50 and 100 ruble notes from circulation in an attempt to remove black money and increase the currency value. The removed notes formed around one third of the total money in circulation. The large scale demonetisation was not successful and Gorbachev faced a coup merely months later in August, however the 1991 attempt led to a successful redenomination of the ruble in 1998 where 3 ze...

Demonetization  is the act of stripping a currency unit of its status as legal tender.  Demonetization  is necessary whenever there is a change of national currency. The old unit of currency must be retired and replaced with a new currency unit.                                   Impacts of  on Indian Economy?                                                              Demonetization is a generations’ memorable experience and is going to be one of the economic events of our time. Its impact is felt by every Indian citizen. Demonetization affects the economy through the liquidity side. Its effect will be a telling one because nearly 86% of currency value in circulation was withdrawn without replacing bulk of it. As a result of ...

Printing and issuing currency notes is the sole authority of the Reserve Bank of India (RBI), which is the central bank of the country. Over the period of time, central banks change the design of banknotes to avoid the problem of counterfeit notes, and sometimes banks take action like the demonetisation of currency notes.

  GST As the name suggests, it is a tax levied when a consumer buys a good or service. It is meant to be a single, comprehensive tax that will subsume all the other smaller indirect taxes on consumption like service tax, excise duty etc. This is how it is done in most developed countries.  It will be a comprehensive nationwide indirect tax on the manufacture, sale, and consumption of goods and services . The aim is to have one indirect tax for the whole nation, which will make India a unified common market. GST will be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method and would make not just manufacturing but also the interstate transportation of goods more efficient.  How will GST work and what all will it subsume? GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage ...