Research

paper

Demonetization and its impact on the Indian

economy Team members

Anjali Polisetty 20BBA7022
Revathi Yaganti 20BBA7032
Chandra sekhar 20BBA7031
Pravallika Lagadapati 20BBA7007
Sai Harish 20BBA7025

Abstract
Demonetization can be viewed as a "surgical strike" against cash transactions, terrorism,
counterfeit money, unorganised commerce, property investment, and the stock market.
Demonetization, on the other hand, is a tool to combat inflation, corruption, and crime, as
well as to depress a cash-based economy and aid commerce. When a country's currency is
changed, demonetization is the most important and necessary step. The existing currency
component must be removed and replaced with a new currency component. If we look at the
Indian industry in a larger sense, it may be divided into three sectors: primary, secondary, and
tertiary. After the demonetization process, only the primary sector has shown some positive
improvement, but the secondary and tertiary sectors have been shattered, affecting the whole
Market in India.
The currency was demonetized twice: once in 1946 and again in 1978. Banks are the most
common benefactors of demonetization. If we look at the Indian industry in a larger sense, it
may be divided into three sectors: primary, secondary, and tertiary. After the demonetization
process, only the primary sector has shown some positive improvement, but the secondary
and tertiary sectors have been shattered, affecting the whole Market in india. The currency
was demonetized twice: once in 1946 and again in 1978. Banks are the most common
benefactors of demonetization. The Honorable Prime Minister of India declared
demonetization on November 8, 2016, and the Indian government has taken the bold step of
demonetizing the 500 and 1000 rupee notes (fully ban). These two largest currency notes
account for 80 percent of the total cash supply. These banknotes have influenced practically
every aspect of the economy.

Keywords: Demonetization, Inflation, Banks, Currency, Black Money, Corruption, Crime,

Sectors, India.

Introduction:
Demonetization is the process of removing a monetary unit's legal tender status. When a
country's currency is changed, the present form or forms of money are taken out of
circulation and retired, frequently to be replaced with new notes or coins. Occasionally, a
country will totally replace its old currency with a new one. The Indian government has made
a significant change in the economy by demonetizing high-value currency notes with
denominations of Rs 500 and Rs 1000. From the 8th of November 2016 at 12 a.m., they were
no longer legal tender. People have until December 30, 2016 to swap whatever notes they
may have. The government's application calls for the removal of current notes from
circulation and the slow replacement of them with a new set of notes. In the short term, it is
expected that the quantity of currency in circulation will be significantly reduced due to
constraints on the amount that individuals may withdraw. The major justifications for
demonetization are twofold: First, to manage phoney notes that may contribute to terrorism or
pose a national security threat, and second, to disrupt or eliminate the "unaccounted
economy." The Reserve Bank of India has eliminated the old currency of Rs 500 and Rs 1000
notes as an official way of payment, which we refer to as demonetization. Demonetization,
according to Investopedia, is the process of removing a currency unit's legal currency status.
The country's financial reform is being seen as a result of the demonetization strategy.

Source of data and Methodology: The study uses secondary data from the following
sources: books, articles, reports, journals, magazines, newspapers, and government websites.
The research for this study is descriptive and exploratory. A primary data analysis was carried
out through structured questionnaire, and the sample size of 30 samples selected to carry out
the analysis. It is descriptive in the sense that the significance of demonetization in India and
the different reasons for it have been well described. It is exploratory in the sense that the
numerous positive and negative effects of demonetization on the Indian economy have been
found. The current study is based on secondary data, which may be found in books,
newspapers, magazines, journals, and websites, among other places.

Objectives of the study:

1. To study about the concept of demonetization
2. To explore the reasons for demonetization in India
3. To study the positive as well as negative impacts of demonetization on Indian
economy.
4. To study about the impact of demonetization in the different sectors of the
economy.
5.To study about the problems of demonetization in India.

REASONS FOR DEMONETISATION IN INDIA:

The government decides to implement demonetisation as the currency spirals out of
control owing to hyperinflationary issues. The government adopted such a measure to
deter illicit activities such as counterfeiting, terrorism, and tax evasion.
Breaks the Demonetization:
Nations demonetize their local currency for a variety of reasons, including:
In order to combat inflation,
a) To combat corruption and criminality (Fake currency, Tax evasion)
b) To depress a cash-based economy
 c) To help the trade
d) To encourage the adoption of a cashless economy
e) To eliminate unexplained money
f) Terrorism and Naxalism are being combated.

Demonetization of Currency: Currency demonetization refers to the removal of a

certain currency from circulation and its replacement with a new currency. It is the exclusion
of the 500 and 1000 denomination currency notes as legal tender under the existing system.
The government announced the goals of the demonetization strategy.
These are the following:
1. First and foremost, it is an endeavour to rid India of corruption.
2. It is also done to prevent unaccounted money.
3. Third, keep rising prices under control.
4. Fourth, to limit the flow of funding to unlawful operations.
5. Fifth, hold people accountable for every penny they own and require them to file income
tax returns.

The History of INDIA’S current Demonetization in India:

This is not the first time in Indian history that the government has taken a courageous step. It
has happened twice before in history. The first currency restriction was declared by the RBI
headquarters on Saturday, January 12, 1946. Currency notes of 1000 and 10,000 were
completely disconnected from the economy at the time. Both of these notes were
reintroduced in 1954. People had given a time limit of 10 days to replace these messages at
the time. Furthermore, it was extended for another 15 days, during which time customers had
to explain why they had not swapped it in the preceding ten days. It didn't have much of an
influence at the time. Only Rs. 134.9 crores of notes were exchanged by the end of 1947, out
of a total of Rs.143.97 crores. As a result, notes worth Rs. 9.07 may have been demonetized.
Second, the currency restriction was declared on January 16, 1978 (Monday) by R. Janaki
Raman, a top officer of the RBI during the time of Moraji Desai's Janata party. At the time,
currency bans were imposed on denominations of 1000, 5000, and 10,000. The folks had only
allowed themselves three days to replace the notes at the time. This time, around 73.1 crore
were demonetized.
Finally, Prime Minister Narendra Modi declared the most recent demonetization on
November 8th, 2016 (Tuesday). This time, the 500 and 1000 note money has been
demonetized from the economy. The government has issued a comprehensive set of
guidelines to hospitals, gas stations, and airports, among others, to accept old denomination
notes until November 11th, 2016.

On October 28, 2016, India's total banknotes in circulation were Rs.17.77 trillion (US$260
billion). In terms of value, the Reserve Bank of India (RBI) annual report for the fiscal year
ending 31 March 2016 stated that total bank notes in circulation were valued at Rs.16.42
trillion (US$240 billion), with nearly 86 percent (approximately Rs.14.18 trillion (US$210
billion) in circulation valued at Rs.14.18 trillion (US$210 billion) in circulation valued at
Rs.14.18 trillion (US$210 billion) in circulation valued at Rs.14.18 trillion (US)

To Find out the extent of Demonitization:

EXTENT OF DEMONETIZATION: November 8, 2016 was seen as a doomsday

for unauthorised cash holders, since demonetization of Rs 500 and Rs 1000 notes resulted in
a major loss of liquidity in the economy. The Indian economy. According to an RBI report,
money was demonetized on (November 8, 2016) Rs. 15.4 trillion in value It accounted for
86.9 percent of the total value of money in circulation.

POSITIVE IMPACT OF DEMONETISATION ON INDIAN ECONOMY:

1. Check on food inflation: Because of the significant removal of money from
circulation, demonetization reduced food inflation in the economy. The liquidity crisis
resulted in a significant decrease in food grain stockpiling. As a result, food inflation
fell by around 240 basis points between November 2016 and January 2017.
2. Elimination of fake currency: Fake currency (counterfeit currency) was completely
eliminated from the economy. With a single stroke of the government's pen, the
racketeers of counterfeit banknotes were severely harmed.
3. Increase in Cash Deposits: There has been an increase in cash deposits into Jhan Dan
Accounts. This pushed financial inclusion into overdrive. Following demonetization,
an estimated Rs. 11.5 lakh crore was deposited in banks, according to the RBI.
4. Attack on Hawala Transactions: Hawala transactions (secret transactions and money
transfers) were severely harmed as cash nearly vanished from the system.
5. Realization of Overdues: People raced to clear their overdues on bank loans, property
taxes, and energy bills, among other things, because the government created a
window for clearing the old dues by utilising the old (demonetized) currency.
6. Push for digitization: As cash became increasingly scarce in the market, consumers
were compelled to switch to digital ways of payment. This was a significant step
toward a cashless economy. It also encouraged people's banking habits, which was a
significant step toward financial inclusion.
7. Tax Compliance: The transition from cash to banking transactions resulted in
improved tax compliance. The government's tax-to-GDP ratio increased considerably.
8. Real estate cleansing: The demonetization process resulted in a thorough cleaning of
the real estate sector. This industry was at the epicentre of the shadow economy. With
the abolition of black money as a result of demonetisation, the real estate industry has
lost its lustre for speculative investment using black money. Prices in the real estate
industry have plummeted, making homes more affordable for the middle and lower
classes.
 NEGATIVE IMPACT OF DEMONETIZATION ON INDIAN
ECONOMY:
1. A Deep Hurt to Economic Sentiment: The notion of banning approximately 86
percent of the currency in circulation resulted in a significant reduction in the
country's monetary basis: the monetary base fell from Rs 22.5 trillion to Rs 13.7
trillion, causing a significant negative impact on economic mood in the domestic
economy. Economic activity is influenced by economic sentiment, and if economic
sentiment suffers, so will economic activity. As a result, following demonetisation,
all economic activity indicators (production, consumption, investment, and
exchange) experienced a significant shock. Producers expected lower production,
consumers planned lower spending, investors planned lower investment, and
exchange began to contract, creating an atmosphere of economic stagnation.
2. Large-scale layoffs in the unorganised sector: Nearly 90% of India's workforce
works in the informal sector to earn a living, and they are very cash dependent and
cash sensitive. A significant reduction in liquidity as a result of the note ban
resulted in an immediate reduction in industrial operations. As a result, there was
widespread layoff in the unorganised sector, and many daily wage earners lost their
employment shortly after demonetization.
3. GDP growth dent: Massive layoffs and deteriorating economic morale projected a
severe impact in GDP growth. According to most estimations (including one by
Prof. Manmohan Singh, the country's previous Prime Minister), demonetization
resulted in a nearly 2% decrease in GDP growth.
4. Real Estate Slump: The economy's real estate industry has suffered as a result of
demonetisation. This industry has been a major contributor to the Indian economy's
GDP growth. Without a doubt, demonetization has rid this industry of black money
transactions. At the same time, the buying and selling of this sector has reached a
tipping point. Construction work has been significantly hampered, and inventory
has accumulated. Employment opportunities have dwindled. The prospects for a
resurgence of this industry are gloomy and remote. The stagnation of the real estate
industry is going to be a major obstacle in the Indian economy's overall growth
process.

PROBLEM FACED AFTER DEMONETIZATION IN INDIA

People in India are experiencing a variety of issues as a result of the demonetization
process. People are dealing with a slew of issues. The fundamental issue is that
individuals do not have enough cash to purchase commodities, even those that are
required on a daily basis. They must wait in huge lines at banks. People who are
uneducated are having difficulty changing their money notes and using e-payment
systems.
Our Honorable Prime Minister, Mr. Narendra Modi, recently made a courageous step
by announcing the demonetization of currency notes of Rs 500 and Rs 1000, which
had a significant impact on those who had dirty money. Some are opposed to it, while
others are hopeful that something positive will happen to our country and the lives of
ordinary people. When a liquidity crisis comes, it is consumption that suffers first,
followed by a slew of other issues affecting people's everyday lives.

Consumption Production Employment Growth Taxation

As predicted, the poorest and most vulnerable members of society have been
disproportionately affected. It would take at least 6 to 9 months to replace and reprint
currency notes totaling around 15 lakh crore rupees.

AGRICULTURE: Cash is the predominant means of transaction in the

agriculture sector, which accounts for 15% of India's overall production.

Almost all vegetable and fruit trading was conducted in cash, and farmers are now
having difficulties. Their produce prices have dropped, and they are expected to suffer
losses.

Notably, this is the time of kharif harvest and the commencement of rabi planting,
which explains why this period is nicknamed the 'busy season' in terms of credit
demand, along with the clustering of festivals and weddings.

JOB MARKET: The industry is bracing for temporary job losses as a result of
demonetization, as production suffers, particularly in labor-intensive industries such
as textiles, clothing, leather, and jewellery. In India, the informal sector employs more
than the majority of people, and most transactions are conducted in cash. Disruption
to this system might jeopardise the jobs and livelihoods of the most vulnerable
members of society. As many as 4 lakh individuals, largely daily wage earners, may
have lost their employment or eschewed work temporarily owing to the absence of
payment so far, and the figure is only likely to rise if the cash crunch continues.

Besides some of the common problems which are created by the

demonetization.
1. Those who do not have access to plastic money and must pay for urgent medical
expenses bear the brunt of the burden.

2. Traders, taxi drivers, and the tourism industry have taken a significant damage.
Himachal and Kashmir horticulturists were suffering since their output was not being
marketed in fruit and vegetable markets. Textile manufacturing,

3. People with weddings in their families have been given a cash withdrawal limit of
Rs 2.5 lakh. Even at that price, a large number of riders have been added. Because to
the lack of cash, many of them would not receive 2.5 lakhs.
5. Private hospitals and pharmacies do not take old notes or provide credit. The 4,000-
rupee cap on bank withdrawals means that many people are already living on the
breadline.

6. Manual labourers and daily wage employees are out of work because their
company lacks the funds to pay them in cash (online is not sufficient).

7. Local markets are on the verge of collapsing. The number of transactions has
decreased.

8.People living in rural regions and farmers are also suffering greatly. Many of them
do not have a bank account or a debit or credit card. Internet banking is a foreign
notion to them. These folks might be convinced to rebel. Aincidence of public theft of
a fair pricing business in Madhya Pradesh has already been recorded.

Challenges Faced by the Common Man due to Demonetization

There are some challenges which are faced by the Common Man due to
Demonetization. These are as follows:

1. Lack of Money in ATMs: Many people rely on ATM services since it is

simple to withdraw money and saves a lot of time and effort. Long lines
have formed as a result of demonetization, and despite individuals
patiently waiting for hours, they are unable to obtain cash. Furthermore,
many people do not have the time to wait in lines owing to a variety of
factors such as old age, poor health, and so on.
2. Lack of Currency Change: Many individuals who receive Rs 2000 notes
from banks or ATMs are unable to obtain change since no retailer is
willing to offer change of Rs 1800 on purchase of Rs 200, hence change is
a major concern for the average person these days.3.
3. Use of E Wallets: Using E Wallets is one of the finest alternatives, but the
difficulty is that many individuals of the older generation do not use smart
phones, and if they do, a large proportion of them do not feel comfortable
sending money through E Wallets.
4. Banks unable to feed their customers: There are still large lines of people
waiting outside banks for their numbers, and it is not uncommon for them
to learn after many hours of waiting that the cash has run out, and they
must return in a few hours or wait in line again the next day. All of this
demonstrates that banks are not adequately equipped to feed their clients.
5. Deaths of the elderly and the poor: It has been reported on numerous
news outlets that some persons who are ill or very frail have died as a
result of waiting in large lines for extended periods of time. The problem is
that no one is willing to accept responsibility for such efforts. Aside from
the elderly, crippled individuals, pregnant women, and family
breadwinners, the general public has been queuing for hours while
unscrupulous black money holders receive fresh notes for free. People are
 dying as a result of hours spent waiting in lines. Even after standing, just
one 2000 rupee note is delivered, or an out of stock board is displayed.

IMPACT OF DEMONETIZATION OF DIFFERENT SECTORS

OF THE ECONOMY
The value of currency notes at the end of March 2016 was 16.42 trillion Indian
rupees, according to the RBI's (Reserve Bank of India) Annual Report for April 2015
to March 2016.

The 500 and 1,000 rupee currency notes accounted for 86.4 percent of the total value.
The government eliminated 86.4 percent of the cash in circulation by value in a single
stroke. In terms of volume, these two denominations accounted for 24.4 percent of a
total of 90.27 billion pieces. Furthermore, according to RBI data, as of March 2016,
632,926 currency notes were counterfeit (known as a FICN) (Fake Indian Currency
Note). The 1,000 and 500 rupee notes have the largest share of NIC (Notes in
Circulation). Demonetization also included the cancellation of certain FICNs. The
impact of demonetization on various sectors of the Indian economy may be divided
into three major categories: primary (agriculture), secondary (manufacturing), and
tertiary (service).

The three different sectors of Indian economy can be contributed to the GDP of our
country. These are:

 Primary Sector Contributes 17% to GDP

 Secondary Sector Contributes 30% to GDP

 Tertiary Sector Contributes 53% to GDP.

After the Demonetization process all the sectors of economy faces the harmful
impacts.

Impact of Demonetization on Primary Sector

As we all know, the Indian economy is an agricultural one, with agriculture
employing 70% of the population. The agricultural sector is labour intensive,
attracting 70% of employment and providing 50% of GDP. The agrarian civilization
is dominated by cash transactions. As a result, unexplained money is fairly frequent in
rural communities. Farmers were unable to sell their goods after the announcement of
demonetization because consumers lacked cash. A farmer relies heavily on
community moneylenders for liquid cash, which is similarly restricted. Rural
consumer spending has slowed from a 12 percent increase in 2015 to 10.9 percent in
2016. Job losses, a drop in agricultural revenue, and social unrest, particularly in the
cash-intensive sectorBecause of the cash problem, vendors in the rural service sector
were unable to sell their items. At the same time, they were unable to get raw supplies
for the service. Transport operators who only accept cash for providing transportation,
which is the only option for raw materials and completed products to travel, have also
jammed their operations. Rural regions have a high concentration of banks with
numerous branches; in fact, rural areas account for 38% of overall branch presence.
So the issue is not one of infrastructure, but of the impediment produced by banks'
failure to provide currency in adequate numbers and denominations on time.

Perishable Commodities Impact

The first week of December is the worst for perishable commodities such as fruits and
vegetables. Because of a lack of processing and storage facilities for these
commodities, they are very vulnerable. The financial crisis has reduced demand,
exacerbating these farmers' predicament. There have been reports of vegetable prices
decreasing by over 60% in wholesale marketplaces. According to the most recent
projections, the CPI inflation of vegetables has dropped by 10%. The cash crunch has
allegedly hampered the onion trade and the poultry business, and there have also been
rumours of large-scale distress sales by orange growers in Maharashtra's Vidarbha
area. As a result, demonetization is unlikely to have an impact on agricultural
development, but it is likely to have an insufficient impact on farmers until public
purchase of pulses improves and distress sales of perishables are handled. Despite the
impact of demonetization, non-horticultural crop prices in India have remained stable.

Fertilizers: Fertilizer producers such as IFFCO, Zuari Agro, and National Fertilizer
said that fertiliser sales, which had declined in the first ten days following the
demonetization of high-value notes, had subsequently rebounded. They stated that
they had extended a month of additional credit to wholesalers, distributors, and
retailers, who are then passing on the savings to their customers.

India's agricultural growth dropped by 0.2 percent in 2014-15 and increased by no

more than 1.2 percent in 2015-16, owing primarily to back-to-back droughts.
According to the CRISIL report, it was predicted to increase at a rate of 4% this year,
but owing to Demonetization, farmers are running out of cash to buy seeds, fertiliser,
equipment, and pay wages to workers and commission to agents, among other things.
Because of the cash constraint, the daily supply transit system has also suffered,
resulting in a 25 to 50% decrease in sales. The primary causes are as follows:

1. Farmers are not educated or aware of how to utilise the E-Payment System.
According to a recent RBI research, 78 percent of the population does not use the
internet, of which 80 to 85 percent are farmers.

2. At most villages, a proper banking system has not yet been developed, and villagers
must go to cities to do so. As a result, farmers spend the majority of their time
exchanging old notes in banks.

Impact of Demonetization on Manufacturing sector:

According to the IPP research report, the business sector grew by 0.7 percent in
October 2016, but following the 8th of November, 2016, demonetization, labour
turnover surged as a result of the shortage of production due to the law demand of
items, which people purchased only when absolutely necessary.

1. Textile sector:-Most brands and retailers report a 40 to 60 percent loss in sales

following Demonetization in the first few weeks, although this drop has
marginally decreased after December, but we can still claim the impact of this
move has affected the industry in 2017 for a few months.

2. Real Estate: Demonetization damaged the real estate market, resulting in a 50%
slump that will last for several months. While the short-term impact is unfavourable,
experts anticipate that interest rate reduction in the following months will improve
house sales.

3. FMCG Products: - Consumer expenditures have also been affected by this

decision; now, only those products that are necessary for daily consumption are
purchased, and most small traders, such as Kirayana Store, small bodies such as street
vendors, and so on, have done their daily transactions only in cash, and because
consumers have less cash in their pockets, the daily sells of these traders have been
reduced by 20 to 30 percent. It is also a short term impact in future things get normal.

Impact of Demonetization on Tertiary Sector

This industry was severely harmed by the move to demonetize in November 2016,
resulting in the greatest slump in nearly three years. The Nikkei India Services
Purchasing Managers' Index (PMI), which analyses firms in the services sector on a
monthly basis, fell to 46.7 in November from 54.5 in October. The catalogue fell into
contraction zone for the first time since June 2015, indicating the steepest drop in
output in over three years. However, when it comes to the banking industry, it is the
only one that has profited from that choice in a variety of ways. This move will attract
a huge number of first-time users, who will be required to utilise the system at least
once to exchange their old notes for new ones.

According to a Moody's survey, after they have passed the 'first-time user' threshold,
customers tend to continue using financial services. This change will raise bank
deposits by 1 to 2% compared to before the demonetization programme.

Result and Discussion

1) Opinion about Prime minister’s action regarding demonetization of Rs500 and
Rs1000 notes
gender Strongly agree indifferent disagree Strongly total
agree disagree
1 6 2 15 2 26
male
0 1 1 1 1
female 4
1 7 3 16 3 30
total
 20
15
10
5
0

malefemale
strongly agreeagreeindifferent disagree strongly disagree

The above table shows the Prime Minister action regarding demonetization of Rs 500
and Rs1000 notes. Here more than half of the small scale merchants were against the
decision. And only 3 percent of people strongly agree and 23 percent of people were
agreeing.

2) Opinion about whether the demonetization policy reduces the usage of black
money
Gender Strongly Agree Indifferent Strongly total
agree disagree disagree
1 5 3 15 2 26
male
0 2 1 1 0 4
female
1 7 4 16 2 30
total
3 23 13 54 7 100
percentage

20
15
10
5
0

malefemale
strongly agreeagreeindifferent disagree strongly disagree
The safeguards put in place for demonetization are ineffective. The policy is
supported by 23% of merchants. 13 percent are agnostic, which indicates they
have no notion. 54 percent of merchants are opposed to the idea, 7 percent
strongly disagree, and only 3 percent strongly believe that usage should be
reducedof shady money

3)Opinion about the effectiveness of demonetization.

Gender Strongly Agree Indifferent Strongly total

agree disagree disagree
1 4 7 12 2 26
male
 0 1 2 1 0 4
female
1 5 9 13 2 30
total
3 17 30 43 7 100
percentage

15

10

0 malefemale
strongly agreeagreeindifferent disagree strongly disagree

The data shows that only 3 percent of people strongly agree the decision and 17
percent agreed. That means the demonetization process does not strongly affect the
day to day activities of small scale people.

4)Does the demonetization process affected day-to-day activities?

Gender Strongly Agree Indifferent Strongly total
agree disagree disagree
3 16 1 5 1 26
male
2 0 1 1 0 4
female
5 16 2 6 1 30
total
17 53 7 20 3 100
percentage

20
15
10
5
0

malefemale
strongly agreeagreeindifferent disagree strongly disagree

According to According to the statistics shown above, over 53 percent of retailers

reported a lack of money and a liquidity issue throughout the demonetization
process. Only 20% of merchants say demonetization has had no effect on them.
5) Does demonetization had affected the purchases of inventories?
Gender Agree Disagree Indifferent total
Male 16 7 3 26
Female 2 1 1 4
Total 18 8 4 30
percentage 60 27 13 100

20
15
10
5
0

malefemale
Agreedisagree indifferent
It is obvious that over half of the merchants polled experienced issues acquiring
inventory during the demonetization period. Only 27% of traders have reported no
issues with purchases since using new cash payment methods.

CONCLUSION

Demonetisation in India is a significant effort made by the Indian government to

combat unaccounted money and corruption. The Indian government has made a
daring step. The primary reason for demonetization is to eliminate unaccounted
money and to curb corruption, crime, and terrorism. Demonetization is a tool
employed by the central government to combat corruption and undeclared money.
Similarly, it affected and brought about changes in every sector of the economy.
To some extent, the Government of India has achieved success. The majority of
the black money has been destroyed. The amount of cash liquidity in the bank
rose day by day. The demonetization process is analogous to a currency with two
faces: on one side, it will benefit the entire nation, while on the other, it will cause
some short-term and long-term issues. Due to a shortage of monetary liquidity, the
Indian general population faced several challenges in terms of reduced
consumption of commodities. Several enterprises were interrupted owing to a
shortage of cash, and both business owners and consumers encountered several
challenges. When the Indian government took the brave step of demonetization, it
had no idea that Indian citizens would suffer this sort of hardship for a long time.
But government has given so many remedies to the citizens of India for time to
time. Finally we may conclude that, Demonetization is a one-time event and will
not have much long term effect and Demonetization is a best device to encounter
the Inflation, Black Money, Corruption and Crime, depress a cash dependent
economy and to assist the trade.

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