What was the primary objective of the demonetization policy implemented in India in 2016 ?

Key Points

• The primary objective of the demonetization policy implemented in India in 2016 was to curb black money.
• Black money refers to funds earned through illegal activities and not declared for tax purposes.
• By invalidating the high-denomination currency notes, the government aimed to reduce the circulation of unaccounted money.
• Other goals included promoting digital transactions and reducing counterfeit currency, but the central focus was on tackling black money.

Additional Information

• The demonetization policy was announced on November 8, 2016, by the Prime Minister of India.
• It involved the withdrawal of ₹500 and ₹1,000 banknotes from circulation, which constituted a significant portion of the currency in use.
• The policy led to a temporary cash crunch and impacted various sectors of the economy.
• Despite mixed opinions on its success, the policy was a major economic move aimed at transforming the financial landscape of India.