Abstract

Objectives: This preliminary study has been undertaken to access the impact of demonetization on agriculture and related activities of different economic agents.

Methods/Statistical analysis: The study is based on primary data collected from farmers (40), traders (30) and consumers (40) and also reviews the impact of demonetization on agriculture from different sources. Percentage and tabular analysis have been used to analyze the data.

Findings: The results show that, in the sample small and marginal farmers were most affected in contrast to large farmers in case of sowing, purchase of inputs and sale of agricultural commodities. Among commodities, farmers dealing with perishables were more affected than who dealt with grains. However, wholesalers were most affected in grain markets & retailers in fruits and vegetable markets. Consumers have used more than one mode of payment to deal with cash crunch situation but, the lower income class people and those who did not use alternative payment methods (e-payment) were affected most. Moreover, all the economic agents have responded in favor of normalization of situation at the end of February, 2017.

Improvements: However, there are scopes in future to replicate this type of study at larger scale and computation of cost and benefits of such policy shocks to know the exact economic impact.

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