Demonetization in India: An Evaluation (original) (raw)

THE DILEMMA OF DEMONETIZATION AND ITS IMPACT ON INDIAN ECONOMY

This article studies the background and impact of the recent demonetization initiative taken by the Indian Government. Upon the advice of Reserve Bank of India (RBI), Government of India demonetized all old bank notes of ₹1000 and ₹500 denominations and replaced them with new bank notes of ₹2,000 and 500 denominations. As per various statements by the government as well as commercial sources, the key motives of this policy were to counter the shadow economy and eradicate use of illicit and counterfeit cash being used in facilitation of the terrorism and illegal activities. The sudden nature of the policy announcement gave rise to various drastic problems e.g. prolonged cash shortages and public unrest that had a significant effect on small businesses, agriculture, and transportation, threatening the economic output. Simultaneously, it attracted heavy criticism from the opposition parties, prominent economists and international media. The move was widely commended by several prominent factions of the banking industry as well as international pundits. The policy was heavily criticized due to its poor planning and timing thus triggering protests, litigation, and strikes. As far as the economic impact of the policy is concerned, following the announcement, the indices of NIFTY 50 stocks and BSE SENSEX dropped by almost 6% along with various other economic factors which have been discussed later in detail. The move also affected India?s GDP and industrial production. In this paper we will discuss the primary motives and benefits of this policy as well as its impact on the socio-economic scenario of India and her people along with recommendations for future.

Demonetization Strategy: Impact On The Indian Population

İlköğretim Online , 2021

The discussion post in favor of demonetization is that the cash that would be quenching “black money” should be lawfully put out to set right the perverse incentive arrangement in the economy. This article has attempted to assess the impact as well as consequences that occur during demonetization and how the tool of Demonetization can be used to exterminate parallel economy. Demonetization is one of the big steps initiated by the Government in addressing several issues like black money, fake currency, corruption, terrorism, etc. The history of demonetization in India and around the world is addressed. Lessons from historical demonetization direct us to redefine a country’s financial system by overpowering the previous causes of failure. Demonetization obliviously brings a lot of embarrassment to the ordinary population but it is for only the short term. However, the long-term benefits of demonetization override the short-term challenges.

Demonetization in India: Rationale, Efficacy and Impact

Prakash Publications, Changanacherry, Kerela, 2017

The first Anniversary of demonetisation is celebrated by Government of India as 'Anti-Black Money Day' whereas the opposition parties led by congress celebrated it as a 'Black day' Post demonetisation, when Banks have received Rs15.28 trillion ($239 billion), or 99% of the currency invalidated, does it mean all the black money has become white or otherwise. The Nobel laurates, international and domestic financial institutions, Economists, intellectuals and common man differed about the relevance of demonetisation and its impact. Few supported while few opposed; few said positive impact while free said it as disaster. For example:- Amartya Sen termed it as 'gigantic mistake both in terms of dealing with corruption as well as the objective of one rapid jump of getting into a cashless economy. He also called it as 'despotic action that has struck at the root of economy based on trust...if (demonetisation) undermine notes, it undermines bank accounts, it undermines the entire economy of trust.

Demonetization - Necessity and it's Impact on Indian Economy

"Demonetization-Necessity and it's Impact on Indian EconomyProf. Dr. Roshan S.PatelAssociate Professor,Department of Accountancy,Sheth C.D.Barfiwala College of Commerce, Surat. Email: roshan_sangita@yahoo.com Mob. No. : 9426124543Abstract: The Government has implemented a major change in the economy environment by demonetizing the high value of currency notes - of Rs. 500 and Rs. 1000. India has carried out demonetization earlier two times, i.e. first was on 12th January 1946 ( Saturday ) and second one was on 16th January,1978 ( Monday ) under Morarji Desai Government. This is the third time demonetization happen in India i.e. on 8th November,2016 ( Tuesday ). So like this in India demonetization has occurred three times. On this ground government announced that INR 500 and INR 1000 notes will cease to be legal tender effective immediately. People have been given a time up to 30th December, 2016 to exchange the notes which are held by them. The purpose of this study is to compare and analyze the impact of demonetization and their significance in the economic development of India by comparing with other countries. The demonetization move has been taken in view to club black money, corruption and issues like circulation of fake currency and terror funding. Here I am going to discuss the reasons of it as well as its necessity to implement in India. I would also like to focus on how the tool of demonetization can be used to eradicate parallel economy. This is one of the biggest steps initiated by government in addressing the various issues like black money, circulation of fake currency, corruption, terrorism etc.Key Words: Demonetization, Indian Economy, Black money, corruption.********* Prof.Dr. Roshan S. Patel""Demonetization - Necessity and it's Impact on Indian Economy"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-1 | Issue-5 , August 2017, URL: http://www.ijtsrd.com/papers/ijtsrd2403.pdf Article URL: http://www.ijtsrd.com/management/accounting-and-finance/2403/demonetization---necessity-and-it's-impact-on-indian-economy/profdr-roshan-s-patel"

Demonetization Conundrum: A Harbinger of Growth or the Ominous Sign of Looming Slowdown

After 8/11/2016, a profound effect of demonization is observed in the large section of Indian society. The effects of demonetization have been widespread, sweeping over the economic, social and political arena. It caused mixed reactions in the population, sheer excitement in the upper class, youth and cause of concern and anxiety in the common worker, and sense of fear in the black money hoarders. In the present article, authors attempted to critically analyses the social, economic and political effects of the scheme by considering various issues and challenges involved in the demonetization process. For this purpose, advantages and disadvantages of the program on several areas were discussed based on short-term and long-term effects. 1. INRODUCTION India has witnessed, recently, the biggest policy shift in the name of demonetization, in which currency notes of 500, 100 rupees were withdrawn from the economy, and currency notes of 2000 were introduced. Technically, the word 'dem...

Demonetization and Its Impact on Common People and the Economy

Global journal for research analysis, 2018

Demonetization of currency is a radical monetary step in which a currency units status as a legal tender is declared invalid. In November 2016, the government of India has taken a bold step to demonetize Rs. 500 and Rs. 1000 currency notes which are the two biggest denominated notes accounted for nearly 80 percent of the currency supply. In India demonetization move has been taken to unearth black money, to trace fake currency, to transform Indian economy into cashless economy, to control terror funding and so on. This decision taken by the government is for welfare of the nation, but so many questions comes in mind that, what will be the short term and long term impact of this decision on Indian economy? What is the impact of this decision on common people? Would the Indian economy be prosperous or would be poor and so on. Against this backdrop the present study is being proposed with following objectives – To study the impact of demonetization on common people. To study the positi...

The Demonetisation Effect: A Conceptual Study

Indian government has taken a very bold decision on note ban on 08/11/2016.The paper discusses about the move of demonetisation taken by Central Government of India on 8th November, 2016 with respect to its objectives, effects, problems due to this as well measures adopted by Govt. of India.This study will help us to know about the positive and negative impact of demonetisation. This study is purely based on secondary data, which is collected from news papers, magazines, websites from internet, some useful books related to topic etc.

Political Economy of Demonetization in India: Issues and Impact

The Indian Economic Journal, 2018

Demonetization is the act of stripping/ withdrawing a currency unit of its status as legal tender. Its impact on Liquidity crunch, Loss to population using currency, Consumption affected, Predicted Loss of Growth, Effect on bank flooded with more deposits, Effect on black money. This study inferred that 91 percent respondents have reported unavailability of cash at banks and ATMs followed by ATMs closed 87percent long quos and waiting hours 76percent, mismanagement in the banks 59percent and lack of cooperation by the bank staff 45percent and 98percent people faced mental agony. Keywords: Demonetization, corruption, black money, un-organised sector, economy,

The Great Indian Demonetization

Journal of Economic Perspectives, 2020

On November 8, 2016, India demonetized 86 percent of its currency in circulation. The stated objectives of the move were to seize undeclared income, to destroy counterfeit currency, to speed up formalization of the economy, and to increase the tax base. I find that the evidence over the subsequent three years suggests that the move had limited success in achieving its stated objectives. Disaggregated data suggests that demonetization did have appreciable costs in terms of lost jobs and output. However, the output costs appear to have been temporary.

Demonetisation -Problems and the Way Forward

Demonetisation, announced by Hon. Prime Minister of India Sri. Narendra Modiji on November 8, 2016 was primarily aimed at eliminating black money and counterfeit notes in the economy. However, the way in which it has been implemented has caused severe hardships to the millions of people, across the socioeconomic circles. It has evoked mixed reactions among economists and politicians. Also, it is doubtful whether the existing framework is adequate for curbing black money that may arise in future. If not, the numerous difficulties suffered by the citizens of the country will be worthless. Because the famous Nobel laureate economist Mr. Paul Krugman said, 'the move might only force the corrupt to become more careful the future'. It is in this context, the paper looks at the demonetisation scenario in India, along with the way forward.