Demonetization and Indian Economy

Abstract

Demonetization of currency means discontinuity of the particular currency from circulation and replacing it with a new currency. 8th November 2016, was a historic day in Indian economy. On this very day Indian Prime Minister Mr. Narendra Modi announced the biggest Note Ban in Indian history, termed as “Note Bandi” that is banning of 500 & 1000 Rupee Notes. Previously in 1946 & 1978 there were demonetization in India, but the scale was not as big as this. As a result 99 % of the circulated money removed from our economy overnight. The main motives of behind this are controlling the black money, avoiding the storage currency, control over corruption, remove the fake currency from market, stopping the terror activities and promoting cashless transactions in India. Demonetization led some good signs for Indian as well as some bad effects also. Due to this step our GDP brought down to 5.7%, more than 150 persons died, more than 15 lakhs people lost their jobs, and a big loss of 1.28 lakhs crore of Indian assets. So a discussion on effects of demonetization is the core of this paper.