Impact of Demonetization on Different Sectors of Indian Economy: An Exploratory Study

Author: Sukanta Kundu

Abstract:
The ‘demon’ in demonetization is in the beginning. Any Government withdraws the legal tender rights of any denomination of currency, it is called demonetization. Demonetization announced on 8th November 2016 was aimed at addressing black money, corruption, counterfeit currency and terror financing. The initial effects of demonetization on common people was terrible. According to Fisher’s Quantity Theory of Money in the short run, money supply will fall, demand will be sluggish and people will lose jobs. The latest Central Statistical Organization (CSO) estimates suggest that the impact of demonetization on Gross value added (GVA) growth was modest. Food inflation declined significantly. Demonetization has made impact on some segments of the export sector such as readymade garments, gems and jewellery. There has been a significant improvement in the use of digital modes of payments post demonetization. This paper articulates the impact of demonetization on various sectors of the Indian economy.

Keywords:Demonetization, Digitalisation, Cash Crunch ,Cashless Transaction CSO, GVA.

DOI:

International Journal of Trade & Commerce (Vol: 7 Issue:1)