Minister of State for Home Hansraj Gangaram Ahir said since illegally held cash forms a major chunk of terror funding, after the Centre's note-ban decision on November last, most of the cash held by terrorists turned worthless.
He said demonetisation led to instant extinguishment of Pak-printed high quality fake Indian currency notes and also adversely affected the hawala operators.
"As per reports of agencies, the demonetisation of bank notes of Rs 500 and Rs 1,000 denominations resulted in significant positive impact on most theatres of violence in the country including stone-pelting incidents in Jammu and Kashmir," Ahir said in reply to a question.
Replying to another question, Ahir said terrorist violence in Jammu and Kashmir has been sponsored from across the border.
Giving statistics, he said in 2017 up to July 23, there were 184 incidents of violence in Jammu and Kashmir in which 109 terrorists, 38 security personnel and 19 civilians were killed.
During the same period in 2016, there were 155 incidents of violence in the state in which 86 terrorists, 31 security personnel and five civilians were killed, Ahir said.
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