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Questions and Answers
According to the Reserve Bank of India Act, which empowers the central government to declare any series of banknotes as ceasing to be legal tender?
What is demonetization?
Which court upheld the demonetization as valid in India?
What is the test of proportionality in relation to demonetization?
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What currency notes were demonetized in India?
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Study Notes
Reserve Bank of India Act
- Empowers the central government to declare specific series of banknotes as no longer legal tender.
- Provides the legal framework for currency management and demonetization processes in India.
Demonetization
- Refers to the act of stripping a currency unit of its status as legal tender.
- Often implemented to combat black money, counterfeit currency, and enhance digital transactions.
Legal Context
- The Supreme Court of India upheld the validity of demonetization in a significant ruling.
- This decision reaffirmed the government's authority to execute such monetary measures under the Reserve Bank of India Act.
Test of Proportionality
- A judicial principle that examines whether the measures taken during demonetization were appropriate and balanced.
- Assesses if the benefits of demonetization outweigh the hardships caused to the public and economy.
Currency Notes Demonetized
- The Indian government demonetized ₹500 and ₹1,000 banknotes in 2016.
- This significant monetary policy move aimed to curb illegal cash holdings and enhance transparency in transactions.
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Description
Test your knowledge on demonetization in India with this quiz! Learn about the legal basis, effects, and significance of this impactful economic policy.
