Advantages & Disadvantages Of Rs 500 and 1000 Note Ban

On 8th November Prime Minister Narendra Modi in his address to the nation banned currency notes of 500 Rs and 1000 Rs. Since then there has been a debate about whether it was a strong and wise decision or just a gimmick or mistake. We will try to make valid points in this article on both sides of the coin. Read about Advantages and Disadvantages of Rs. 500 and 1000 Note Ban In India.

Every decision has pros and cons, and same goes with this new announcement by PM about banning Rs. 500 and 1000 note. We have to analyze and dig deep to find out all possible positives and negatives of this new policy

Advantages of Rs. 500 and 1000 Note Ban In India

1. Reduction In Black Money: At least some black money will be either deposited in the bank or will be burnt out of fear.

2. Reduction In Smuggling and Trafficking: Anyone can assume that smuggling, trafficking, and drug racquets must have been using these notes and it will be near to impossible for these criminals to convert money into white.

3. Real Estate Rates May Come Down: It is not a hidden truth that most of the unaccounted and black money were being used in buying real estate properties and once cash is out of the market, prices may come down as demand will reduce.

4. Fake Currency goes out of the market with immediate effect. This was mostly supplied from our neighboring countries and was used in Drug smuggling and Terrorist activities.


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5. A hard hit on corruption as it will be impossible to bribe in 100 Rs. note. It is only a matter of time when 2000 Rs. will be used in bribe money.

6. The Government gets the chance to clean Indian economy and try to make it less dependent on cash.

Disadvantages of Rs 500 and 1000 Note Ban In India

1. It will affect small traders, Farmers, Labours who earn daily to survive. One bad season and most of them will face an economic crisis at home. It will be very tough for them to recover soon.

2. Inconvenience to the public but that will be for short term.

3. There is a difference between unaccounted saved money and black money. Most of the initial deposits are either unaccounted money saved at home or white money which were in regulation circulation.

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4. Demands may go down for an extended period of time. Less cash means less buying capacity which will reduce demand in the market.

5. It is possible that valuation of house and Gold may go down because of lack of demand in the market, which means a reduction in net worth of middle-class families owning these assets.

6. Black money in the form of Land, Gold, and foreign currency will remain unturned. Many economists claim that they are the prime source of Black Money owned by Indians.

7. Notes with higher denomination like 2,000 will make it easy for Black money owners to create a new stack.