Demonetization in India
INDEX
CONTENT PAGE NO.
Chapter 1
INTRODUCTION 1–6
Chapter -------------------------------------------------------------------------------------------- 1
OBJECTIVES AND OUTCOMES OF DEMONETIZATION
7 ----------------------------------------------------------------------------------------------------- 6
Chapter 3 IMPACT OF DEMONETIZATION IN INDIA 19 --------- 18
Chapter 4 POSITIVE AND NEGATIVE IMPACTS OF DEMONETIZATION
34 -------------------------------------------------------------------------------------------------- 33
Chapter 5
CONCLUSION 39 – 40
BIBLIOGRAPHY
, CHAPTER 1
INTRODUCTION
The Government of India has implemented a major change in the economic environment
by demonetizing the high value currency notes- of Rupees 500 and 1000 denomination.
These ceased to be legal tender from the midnight of 8th of November 2016. People have
been given upto December 30, 2016 to exchange the notes held by them. The application
by the government involves the eradication of these existing notes from circulation and a
plodding replacement with a set of notes. Demonetization is the act of stripping a currency
unit of its status as legal leader. It occurs whenever there is a change of national currency:
The current form or forms of money is pulled from circulation and retired, often to be
replaced with new notes or coins. Sometimes, a country completely replaces the old
currency with new currency. In the short term, it is proposed that the cash in circulation
would be considerably squeezed since there are the limits placed on the amount that
individuals can withdraw. The main reasons offered behind the demonetization are two-
fold: Firstly, to control the fake notes that could be contributing to terrorism or a national
security concern and Secondly, to destabilize or eradicate the “unaccounted economy”.
Demonetization for us means that Reserve Bank of India has withdrawn the old currency
of Rs. 500 and Rs.1000 notes as an official mode of payment. The policy of
demonetization is being seen as a financial reformation of country.
1|Page
,SIGNIFICANCE OF STUDY
The Demonetization had a great significance and immediate impact on Indian Economy
and on life of Indian Citizen. Demonetization can be assumed as a “Surgical Strike” on
unaccounted Money, Terrorism, Fake Currency, Unorganized trading, Real Estate,
Share market. On the other hand Demonetization is a device to encounter the Inflation,
Corruption and Crime, depress a cash dependent economy and to assist the trade.
Demonetization is the mainly central and essential when there is an alteration of national
currency. The previous component of currency must be distant and substituted with a new
currency component. This paper attempts to explain the meaning of demonetisation,
examine the reasons and extent of demonetisation and explore the positive and negative
impact of demonetisation on Indian economy. The Indian industry on a broader way it can
be categories in three sectors like Primary sector, Secondary sector and Tertiary sector.
After the Process of demonetization only the Primary sector shows some encouraging
development and this study talking about the Secondary and Tertiary sector both were
smashed down and it will affects the whole Indian Market. This paper is an attempt to
find out the long term and short term impacts of demonetization on Indian Economy both
positive and negative. This study adopts a descriptive, analytical approach based on
secondary data to find out these positive and negative effects of this demonetization on
Indian economy. Also the study is an attempt to find „Impact of Demonetization‟ on
public and also find that it adversely affect life of people and also help to destroy black
money and it is followed by corruption, terrorism
etc.
2|Page
, REVIEW OF LITERATURE
1. Ahmed and Alam (2017): The book describes about the causes of process of
demonetization, the book explains that demonetization decision was taken due to
presence of large amount of fake currency in large amount economy and public.
This all was causing adverse effect on Indian Economy. In addition to it the
government realized that this all was the main source of black money in the
economy. Thus these currency notes accounting for eighty five percent of the total
money supply of the economy were withdrawn as legal tender.
2. Ghosh, Chandrasekhar and Patnaik (2017): The book examines the event of
demonetization of Indian high value notes last year. The book further explains that
the move was aimed at elimination of black money and corruption. But it had
limited results and rather it lead to distress, disruption of economy and loss of
income. This book attempt to probe and tries to assess the impact of
demonetization on the different section of the population of the country. Further
the book explains the process of demonetization, its main features, its ulterior and
operative motives, the experiences of other countries, the implementation, chaos
and the problems aftermath, the various sectors of economy like agriculture,
banking, industry etc. The book also discusses about new goal of cashless
economy government and a view of scepticism about the political motive about
the process demonetization.
3. Jain (2017): The book examines various aspects of demonetization like, actions
initiated by the government of India in relation to demonetization, need for
demonetization and remedies for it, salient features of the policy of the
demonetization, positive and negative reactions towards the policy of
demonetization, impact on of demonetization on various sectors of economy like
3|Page
INDEX
CONTENT PAGE NO.
Chapter 1
INTRODUCTION 1–6
Chapter -------------------------------------------------------------------------------------------- 1
OBJECTIVES AND OUTCOMES OF DEMONETIZATION
7 ----------------------------------------------------------------------------------------------------- 6
Chapter 3 IMPACT OF DEMONETIZATION IN INDIA 19 --------- 18
Chapter 4 POSITIVE AND NEGATIVE IMPACTS OF DEMONETIZATION
34 -------------------------------------------------------------------------------------------------- 33
Chapter 5
CONCLUSION 39 – 40
BIBLIOGRAPHY
, CHAPTER 1
INTRODUCTION
The Government of India has implemented a major change in the economic environment
by demonetizing the high value currency notes- of Rupees 500 and 1000 denomination.
These ceased to be legal tender from the midnight of 8th of November 2016. People have
been given upto December 30, 2016 to exchange the notes held by them. The application
by the government involves the eradication of these existing notes from circulation and a
plodding replacement with a set of notes. Demonetization is the act of stripping a currency
unit of its status as legal leader. It occurs whenever there is a change of national currency:
The current form or forms of money is pulled from circulation and retired, often to be
replaced with new notes or coins. Sometimes, a country completely replaces the old
currency with new currency. In the short term, it is proposed that the cash in circulation
would be considerably squeezed since there are the limits placed on the amount that
individuals can withdraw. The main reasons offered behind the demonetization are two-
fold: Firstly, to control the fake notes that could be contributing to terrorism or a national
security concern and Secondly, to destabilize or eradicate the “unaccounted economy”.
Demonetization for us means that Reserve Bank of India has withdrawn the old currency
of Rs. 500 and Rs.1000 notes as an official mode of payment. The policy of
demonetization is being seen as a financial reformation of country.
1|Page
,SIGNIFICANCE OF STUDY
The Demonetization had a great significance and immediate impact on Indian Economy
and on life of Indian Citizen. Demonetization can be assumed as a “Surgical Strike” on
unaccounted Money, Terrorism, Fake Currency, Unorganized trading, Real Estate,
Share market. On the other hand Demonetization is a device to encounter the Inflation,
Corruption and Crime, depress a cash dependent economy and to assist the trade.
Demonetization is the mainly central and essential when there is an alteration of national
currency. The previous component of currency must be distant and substituted with a new
currency component. This paper attempts to explain the meaning of demonetisation,
examine the reasons and extent of demonetisation and explore the positive and negative
impact of demonetisation on Indian economy. The Indian industry on a broader way it can
be categories in three sectors like Primary sector, Secondary sector and Tertiary sector.
After the Process of demonetization only the Primary sector shows some encouraging
development and this study talking about the Secondary and Tertiary sector both were
smashed down and it will affects the whole Indian Market. This paper is an attempt to
find out the long term and short term impacts of demonetization on Indian Economy both
positive and negative. This study adopts a descriptive, analytical approach based on
secondary data to find out these positive and negative effects of this demonetization on
Indian economy. Also the study is an attempt to find „Impact of Demonetization‟ on
public and also find that it adversely affect life of people and also help to destroy black
money and it is followed by corruption, terrorism
etc.
2|Page
, REVIEW OF LITERATURE
1. Ahmed and Alam (2017): The book describes about the causes of process of
demonetization, the book explains that demonetization decision was taken due to
presence of large amount of fake currency in large amount economy and public.
This all was causing adverse effect on Indian Economy. In addition to it the
government realized that this all was the main source of black money in the
economy. Thus these currency notes accounting for eighty five percent of the total
money supply of the economy were withdrawn as legal tender.
2. Ghosh, Chandrasekhar and Patnaik (2017): The book examines the event of
demonetization of Indian high value notes last year. The book further explains that
the move was aimed at elimination of black money and corruption. But it had
limited results and rather it lead to distress, disruption of economy and loss of
income. This book attempt to probe and tries to assess the impact of
demonetization on the different section of the population of the country. Further
the book explains the process of demonetization, its main features, its ulterior and
operative motives, the experiences of other countries, the implementation, chaos
and the problems aftermath, the various sectors of economy like agriculture,
banking, industry etc. The book also discusses about new goal of cashless
economy government and a view of scepticism about the political motive about
the process demonetization.
3. Jain (2017): The book examines various aspects of demonetization like, actions
initiated by the government of India in relation to demonetization, need for
demonetization and remedies for it, salient features of the policy of the
demonetization, positive and negative reactions towards the policy of
demonetization, impact on of demonetization on various sectors of economy like
3|Page
