RESEARCH METHODOLOGY

TOPIC – EFFECTS OF DEMONETIZATION IN INDIA

NAME – Utsav Maity

CLASS - SYB

BATCH- 2021-2024

ROLL NO- 2189

SUBMITTED TO- Prof.Ashu Gupta

DATE OF SUBMISSION- 22ndAug 2022

DAIRY ENTRY

S NO DATE TASK PERFORMED DURATION

1. AUG 3 The deciding topic for the project 1 hr
2. Aug 4 Reviewed news articles and statement 2hr
3. Aug 6 Reviewed 4 research papers 2 hr
4. Aug 8 Reviewed 4 research papers 1.5 hr
5. Aug 9 Reviewed 3 research papers 1 hr
6. Aug 12 Finalizing literature review 1 hr
7. Aug 17 Introduction and research objective finalization 1 hr
8. Aug 18 Final editing of the cover page 30 min
9. Aug 22 submission
INTRODUCTION

Demonetization is the act of stripping a currency unit of its status as legal tender. 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. The government of India has implemented a major change in
the economic environment by demonetizing the high value currency notes – of Rs 500 and Rs 1000
denomination. These ceased to be legal tender from the midnight of 8th of November 2016. People
have been given up to 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 new notes. 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/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Bank of India has withdrawn the old currency of Rs 500 and Rs 1000 notes as an official mode of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. According to Investopedia, demonetization is the act of stripping a currency unit of its
status as legal tend

RESEARCH OBJECTIVES

1. To study the concept of demonetization.

2. To study the benefits of current decisions of demonetization policy in India.

3. To study the problems of demonetization in India.

4. To study the impact of demonetization in the different sectors of the economy

LITERATURE REVIEW

Experts and Economists views about demonetization in India.

Name of proffesion Statements/comment/thoughts

expert/economist
Amartya Sen Leading economist; Noble According to Indian express, Professor
Laureate; recipient of the Bharat Amartya Sen said that millions of
Ratna innocent people have
deprived from their money and being
suffered to get their own money back
Dr. Manmohan Former Prime Minister; eminent According to Indian express, the former
Singh economist; former RBI governor) prime minister, RBI governor, and
economist Dr. Manmohan
Singh said in Rajya Sabha that this
demonetization is an organized loot. In
his speech he said that,
the way the scheme has been
implemented will harm the agricultural
sector in India, it will also
harm the small-scale industry and
informal sectors of the economy. He
also said that India’s GDP can
falls about 2 percentage point as a
result of this note banned policy.
Cooperative banks which serves
the rural areas are non-functional and
has been prevented from cash. Former
prime minister also
said that this note banned policy is a
monumental mismanagement.

Kaushik Basu (Leading economist; Senior Vice According to Indian express, Mr.
President and Chief Economist at Kaushik Basu said that government of
 The World Bank
Arun Shourie Former economist at the World
Bank; recipient of the Padma
Bhushan and Union
Minister
Arun Jaitley Current Finance Minister of India;
Senior Advocate, Delhi High Court
Arvind Virmani Leading economist; Former India’s
representative at IMF; Former
Chief Economic Adviser, GOI
India made policy that any
person who deposits money beyond
the limit of 250000, have to pay huge
penalty. This policy
created a new black market, in which
large amount of illicit cash broken in to
smaller parts and
deposited by the members of team;
which is a legal way of illegal activity.
Mr., Basu said this move is
hurting innocent people who has no
illegal money but they have built up
cash reserve over a long
period of time.
According to Indian express, Mr. Arun
Shourie said in an interview with NDTV,
that this note banned
policy made by present Indian
government is not poke on black
money, because the owner of black
money converted their money into
tangible and intangible assets. The
persons who have huge black
money, they never keep money in cash,
they never keep money under the
mattress, or in gunny
bags. They invested their black money
in properties, jewelleries, stock
markets or in other assets
According to Indian Express Mr. Arun
Jaitley gives his opinion that the
demonetization is good for
economy, Indian banks were facing
NPA problem since last many years,
now banks will have more
money to lend for many sectors of the
economy.
According to Arvind Virani
demonetization is a useful technique to
solve the problem of black
money, but he also said that it needs
 the deeper study to check the
effectiveness of demonetization.
Immediate effects of demonetization
are negative impact in retail trade in
goods and services.
Currency for everyday transaction have
to be replace soon.

Surjit Bhalla Chairman, Oxus Investments, a
Delhi-based economic
research/advisory firm; Former
Professor at Delhi School of
Economics; Previously worked at
the World Bank
According to Mr. Surjeet Bhalla BJP
government take a Courageous step,
and the credit goes to our
prime minister Mr. Narendra Modi. If
this step would be successful then it
will be biggest reform in
India. This policy will silently create the
money for the economy.

Literature review of projects/journals

Tittle of the project Researcher Summary of research

demonetization and Nithin and They opined that demonetization has short term
its impact on Indian Sharmila negative impact on different sectors of the economy
Economy and such impacts are solved when the new currency
notes are widely circulated in the economy. They also
argued that the government should clear all the
problems created due to demonetization and help
the economy to work smoothly.

a study on Black Nikita Gajjar

Money in India: (2016) She described the framework, policy options and
Present Status and strategies that Indian Government should adapt to
Future tackle with this issue and the future challenges to be
Challenges and faced by the Government.
Demonetization
demonetization and Vijay and Shiva They felt that the rewards of demonetization are
its complete financial (2016) much encouraging and the demonetization is in the
inclusion. long-term interest of the country. They expressed
that it had given temporary pain but it taught
financial lessons. It influenced banking industries to
do considerably investment on digitalization of
 banking services.

a study on Manpreet Kaur He said that the cashless system in the economy has
demonetization and (2017 many fruitful benefits less time-
impact on Cashless consuming, less cost, paper less transaction etc. and
Payment he expected that the future transaction system
System in all the sectors is cashless transaction system.

demonetization and Lokesh Uke researched on demonetization and its effects in India.
its effects in India (2017) He studied positive and
negative impact of demonization in India. The study
was based on secondary data available in
newspaper, magazines etc. The main purpose of
demonetization is to eradicate the black money and
diminish the corruption. He expressed that
Government of India has become success to some
extent. Demonetization had negative impact for a
short duration on Indian financial markets. But he
said that the real impact will be shown in future.

Demonetization and Sweta Singhal It was a case

E Banking in India (2017) study to check the awareness level of people of rural
areas in India about e-banking facilities and
how much it has increased after demonetization. A
sample size of 100 was used with ANNOVA test
to show that rural people differ much with urban
people in their awareness level as well as usage
level of e-banking. It was found that urban male
youth have higher awareness and usage of e-
banking. She felt that the study shall also helpful for
banks to improve their e-banking facilities.

References

[1] Nithin Kumar A and Sharmila (2016). Demonetization and Its Impact on Indian Economy.
International Journal of Humanities, Arts, Medicine and Science. ISSN (P):2348-0521. ISSN (E): 2454-
4728. Vol. 4. Issue12, Dec 2016. Pp 23-26.

[2] Dr. Pratap Singh and Virender Singh (2016). Impact of Demonetization on Indian Economy.
International Journal of Science Technology and Management. ISSN (O) 2394-1537. ISSN (P) 2394-
1529. Vol. No.5, Issue No. 12, December 2016.
[3] S Vijay Kumar and T Shiva Kumar (2016). Demonetization and Complete Financial Inclusion.
International Journal of Management Research & Review. ISSN: 2249-7196. Volume 6. Issue 12.

[4] Nikita Gajjar (2016). Black Money in India: Present Status and Future Challenges and
Demonetization. International Journal of Advance Research in Computer Science and Management
Studies. ISSN:2321-7782. Volume 4, Issue 12, December 2016.

[5] Office of the Development Commissioner (2016). Demonetization and Promoting use of digital
payment system.

[6] Economic Consequences of demonetization of Rs. 500 and Rs. 1000 notes. (2016). Care Ratings:
Professional Risk Opinion.

[7] Lokesh Uke (2017). Demonetization and its effects in India. SSRG International Journal of
Economics and Management Studies. Volume 4. Issue 2. February 2017.

[8] Dr. Sweta Singhal (2017). Demonetization and E-Banking in India. International Journal of New
Technology and Research (IJNTR). ISSN: 2454-4116. Volume3. Issue1. January 2017. Pp 20-25.

[9] Manpreet Kaur (2017). Demonetization: Impact on Cashless payment system. International
Conference on Recent Trends in Engineering, Science and Management. ISBN:978-93-86171-21-4.
8th January, 2017.