Demonetisation refers to withdrawal Of money in circulation as a legal tender of the country.
Example : Demonetisation of Rs 1,000 and Rs 500 notes by rhe Reserves Bank of India (RBI) on Nov. 8, 2016.
Benefits of Demonetisation -
(i) Demonetisation combats black money. Black money help by the people reduced to pieces of paper, unless people make a declaration of it.
(ii) Demonetisation leads to a rise in tax revenue of the government (implying a fall in budgetary deficit).This happens because Demonetisation forces people to shift to cashless transaction with reduces tax evasion.
