Demonetization and Its Impacts in India

Abstract

Demonetization refers to withdrawal of a particular form of currency from circulation in an economy. Demonetization is necessary whenever there is a change of national currency and it has its pros and cons. The old units of currency must be removed and substituted with a new currency. In India, the currency was demonetized first time in 1946 and second time in 1978. On 8^th November, 2016 the currency was demonetized third time by the present government. This paper elucidates the impact of demonetization on the availability of credit, spending, government finances and public.