Impact of Demonetization in Indian Economy

Abstract

The government has implemented a major change in the economic environment by demonetizing the high value currency notes – of Rs 500 and Rs 1000 denomination. The proposal by the government involves the elimination of these existing notes from circulation and a gradual replacement with a new set of notes. The original objectives are eliminating fake currency, inflicting losses on those with black money, and disrupting terror and criminal activities. The New objectives are enabling the growth in bank credit and turning India into a cashless economy. A cost benefit analysis suggests that the benefits were relatively small when compared with the costs. This paper aims to study the impact of demonetization on the different sectors of Indiaand its economy. Both primary and secondary data collection methods have been used to study the objectives. The study concludesthat thedemonetization needs to be done something to prevent recurrence of black money and parallel economy.