Impact of Demonetisation on Indian Economy: A Critical Study

Himanshu Kushwaha; Ashwani Kumar; Zainab Abbas

Authors

Himanshu Kushwaha Research Scholar (D.Phil.), Department of Commerce & Business Administration, University of Allahabad, Uttar Pradesh, India.
Ashwani Kumar Research Scholar (D.Phil.), Department of Commerce & Business Administration,University of Allahabad, Uttar Pradesh, India.
Zainab Abbas Research Scholar (D.Phil.), Department of Commerce & Business Administration,University of Allahabad, Uttar Pradesh, India.

Keywords:

Currency, Demonetization, Cashless transaction, Digital economy, Indian Economy

Abstract

Withdrawing units of money from circulation is demonetisation; units of money are denied the status of legal tender. Demonetisation is defined as a process by which currency units will not remain legal tender. The currency notes will not be taken as valid currency. Demonetisation is a step taken by the government where currency units are ceased of its status as legal tender. Demonetisation is a basic condition to change national currency. In other words, demonetisation can be said a change of currency where new units of currency replace the old one. It may involve the introduction of new notes or coins of the same denomination or completely new denomination. The currency has been demonetised thrice in India. The first demonetisation was on 12th January 1946 (Saturday), second on 16th January 1978 (Monday) and the third was on 8th November 2016 (Tuesday). The study attempts to understand meaning and reasons of demonetisation, the sector-wise impact of demonetisation. This study also gives an insight into the positive and negative impact of demonetisation on Indian economy. This study is of descriptive nature so all the required and relevant data have been taken up from various journals, magazines for published papers and websites. Books have also been referred for theoretical information on the topic as required.

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