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India has faced demonetisation three times so far i. e. In 1946, 1978 and 8th November 2016.

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India's Experience with Demonetisation

India has undergone demonetisation twice in its history. The first instance of demonetisation took place in 1946, and the second instance occurred in 2016.

Demonetisation of 1946

The demonetisation of 1946 was a result of the World War II economic crisis. The Indian government decided to discontinue high-denomination banknotes of Rs. 1,000, Rs. 5,000, and Rs. 10,000 to curb black market activities and war-time inflation. The government also introduced new banknotes of Rs. 1, Rs. 2, and Rs. 10 denominations to replace the discontinued notes. This demonetisation was relatively successful, and the economy recovered in a short period.

Demonetisation of 2016

The second demonetisation in India occurred on November 8, 2016, when the government announced the discontinuation of Rs. 500 and Rs. 1,000 notes. The government claimed that this step was necessary to curb black money, corruption, and counterfeit currency. People were given a deadline of December 30, 2016, to deposit their old notes in banks.

The demonetisation of 2016 had a significant impact on the Indian economy. Many people faced difficulties as they were unable to exchange their old notes for new ones due to long queues and a shortage of cash. The informal sector of the economy was hit hard, as many small businesses and daily wage workers were unable to function without cash. However, the government claimed that this move was successful in curbing black money and counterfeiting.

Conclusion

India has undergone demonetisation twice in its history. While the first instance of demonetisation was relatively successful, the second instance had a significant impact on the economy. However, both demonetisation efforts were aimed at curbing black money and corruption in the country.