How did demonetization contribute to creating a less-cash or cash-lite economy?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- By channeling more savings through the formal financial system.
Demonetisation is to create a less-cash or cash-lite economy, i.e., channeling more savings through the formal financial system and improving tax compliance. Though there are arguments against this as digital transactions require use of cell phones for customers and Point-of-Sale (PoS) machines for merchants, which will only work if there is internet connectivity.