A Study on Indian Demonetization and its Impact on Inflation

Abstract

This paper aims to identify the general impact of demonetization in the Indian Economy with special reference to its impact in the price level. Actual and expected trends of rural urban and combined along with index of agricultural laborer food group consumers price index were shown and concluded that deviations were there. During later part the residuals portrayed that actual indexes were less than the expected. The study was done mainly concerning around three hypotheses and the null hypothesis was put to test using paired and unequal variances  “t” test. The study thus concluded that there was significant impact of demonetization on the agricultural laborer food group but not so significant impact on the combined consumers price index. Nevertheless results portrayed significant differences in means of consumers prices index among rural and urban India.