2-D Effect in Indian Economy

Abstract

While the world reeled from the shock result of the US Presidential Elections, on November 9th, 2016, a nation of a billion of people faced an even bigger surprise. The Prime Minister of India, Narendra Modi, dropped a bombshell, declaring that all existing currency notes of 500 and 1000 rupees would be demonetised, with immediate effect. PM Modi pointed out that the objectives behind such a drastic measure were to combat corruption, to curb terror financing and discourage tax evasion on undeclared income, which is also known as “black money”. Since November 8, every Indian is in the dilemma of choosing a secure and convenient cashless payment option. The cashless payment options that are currently available include credit/debit cards, e-wallets such as Paytm, Mobikwik, SBIe-wallet, etc., RTGS, NEFTetc. This unpredictable action taken by the Prime Minister Narendra Modi has not only impacted e-commerce but at the same time has an impact on the consumers and their shopping behaviour through online shopping. Demonetization is a generations’ memorable experience and is going to be one of the economic events of our time. Its impact is felt by every Indian citizen. Since November 8, every Indian has only one thing on mind: the dilemma of choosing a safe, secure, convenient and cashless payment option. Currently available cashless payment systems include credit/debit cards, e-wallets such as Paytm, Unified Payment Interface (UPI), IMPS, USSD, RTGS, and NEFT. The main focus of the study is to understand and analyze the effect of demonetization on consumer’s frequency of buying product and consumer’s mode of payment for online shopping post demonetization