TIL Desk/Business/New Delhi/ Temporary setbacks notwithstanding, note ban will have a positive development impact in the long term as it accelerates financial deepening, foster financial inclusion and increase transparency, the World Bank has said. In a report titled ‘South Asia Economic Focus – Globalisation Backlash’, it said eliminating tax evasion and corruption — the most talked objectives of junking old 500 and 1000 rupee notes — is “typically a demanding process involving multiple measures overtime.”
Demonetisation caused an immediate cash crunch, hurting economic growth, it said. In November last year, the government withdrew from circulation 86 per cent of the currency and gradually replaced them with new 500 and 2000 rupee notes, making demonetisation a massive currency exchange.
“The most prominent reasons brought forward for this far- reaching move were to curb black money, to eliminate counterfeit notes, and to promote the use of electronic payments,” the report said. Eliminating tax evasion and corruption is typically a demanding process, involving multiple measures over time, it said.
