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Impact of Demonetisation on Indian Economy:Short-Term Costs and Long-Term Benefits


Affiliations
1 Department of Economics, Lovely Professional University, Phagwara, Punjab-144411, India
     

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On November 8, 2016, government of India had demonetized the two high denomination currency notes of Rs. 500 and Rs. 1000 to curb the black money, corruption and terrorism in the economy. As in India people are more comfortable with cash transactions. But, sometimes such transactions are misused by the society and people with accounted money also start using high amount of transaction in form of cash that again generates black money, corruption counterfeit currency and terror financing. Thus, government's move towards demonetisation of currency will definitely address the above mentioned issues and also help the economy become more digitize. In this regard, the present study shows the impact of demonetisation on Indian economy in view of short term costs and long term benefits.

Keywords

Black Money, Cashless Economy, Costs and Benefits, Demonetisation, High Denomination.
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  • Impact of Demonetisation on Indian Economy:Short-Term Costs and Long-Term Benefits

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Authors

Heena Goel
Department of Economics, Lovely Professional University, Phagwara, Punjab-144411, India

Abstract


On November 8, 2016, government of India had demonetized the two high denomination currency notes of Rs. 500 and Rs. 1000 to curb the black money, corruption and terrorism in the economy. As in India people are more comfortable with cash transactions. But, sometimes such transactions are misused by the society and people with accounted money also start using high amount of transaction in form of cash that again generates black money, corruption counterfeit currency and terror financing. Thus, government's move towards demonetisation of currency will definitely address the above mentioned issues and also help the economy become more digitize. In this regard, the present study shows the impact of demonetisation on Indian economy in view of short term costs and long term benefits.

Keywords


Black Money, Cashless Economy, Costs and Benefits, Demonetisation, High Denomination.