Demonetization policy is implemented in order to bring changes to the existing currency system. Following the demonetization policy, a country can change the paper money to encourage a cash-less economy in order to boost the electronic money system. The basic reason behind the implementation of demonetization is to track black money, reduce corruption, and control inflation and to encourage electronic exchange of money in the country. The aims of demonetization are the positive ones but the implementation of the policy is important to gain the desired outcomes.
How a Country Can Make Demonetization Policy Work?
For a country to achieve goals of demonetization, it is necessary that they consider the chaos that will definitely occur because of demonetization. People have to exchange their money and people suffer due to long queues.
To take a lesson from a case of demonetization in order to predict the results, an example of India is the classic one. If a country really wants to implement demonetization, the actual results can be achieved by eliminating corruption. Strict regulations are necessary after the implementation.
To track down black money, strong regulatory mechanisms and organizations are important. It is important that the state’s check and balance mechanisms really work for the government and the nation as well. Additionally, efficient taxation rules should be established and implemented.
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