Impact of Demonetization on Indian Economy

Abstract

Demonetization is a drastic intervention into the economy involving removal of the legal tender status of a currency. Demonetization is used as a tool to stabilize a currency and fight inflation, to facilitate trade and access to markets and to push informal economic activity into more transparency and away from black and gray markets. Impact of demonetization is extremely immense and fundamentally major as far as Indian economy is concerned.  An  attempt has been made in this paper to discover the elements and effects of demonetization on the Indian economy and its kin. It is observed that the principle for leading demonetization by the Government was to evacuate black money which appeared to be vital for arresting anti-national activities and for fighting against corruption.  The exercise may produce various short-term or long-term impacts on economy. The study attempts to perceive the meaning and reasons of demonetization. This study also gives an insight into the positive and negative impact of demonetization on Indian economy. Keywords: Demonetization, Indian economy, Black money, Currency, Government, Corruption