Monetization to help MUDRA Scheme
8 November 2016, Prime minister of India Sh. Modi had announced about the monetization on National TV. Entire world had shocked & people had denied to accept Rs. 500 & 1000 from immediate effect. People are in queue to get & submit cash because according to announcement, all two big denominations would be invalid after 12 midnight.
Everyone knows that the black money was moving simultaneously in Indian economy and day by day its ratio were being increased. Maximum people wanted to do business in cash to save taxes and that mindset was really hurdle to implement GST in India.
Now after monetization lots of positive changes will occur & according to sources approx 40 to 65 percent new taxes payers will be joined the tax system & black money will regularize forcefully with penalty. In Financial Year 2016-17, the tax revenue will be comparatively higher than previous years and govt. will have excess money for different schemes, pay loans & investment. Now India have loan of World Bank is $104 billion & according to external debt data released by Ministry of Finance in 2015-16, the total debt was $485.6 billion.
Monetization will increase the liquidity in banking system & because of liquidity banks will able to distribute loans under mudra scheme. It will help in digital India movement & GST.