Influence of Demonetization on Indian Economy

(भारतीय अर्थव्यवस्था पर विमुद्रीकरण का प्रभाव)

Mr. Dinesh Kumar Patidar

Assistant Professor, Economics,

Government College Suwasra, Mandsaur (M.P.), India

Corresponding Author: Patidardinesh886@gmail.com

 

DOI: 10.52984/ijomrc2106

ABSTRACT  

Demonetization is the withdrawal of the existing form of units of money i.e. rupee from the economic circulation. Units of money are denied legal tender status. Demonetization can be defined as a process by which currency units cease to be legal tender. Demonetization is the reason for not taking currency notes as legal tender. Demonetisation is a step taken by the government where currency units eliminate their status as legal tender. Demonetisation is a basic condition for replacing the national currency. In other words, demonetization can be called a change of currency where new units of currency replace the old one. This may include the introduction of new notes or coins of the same denomination or an entirely new denomination. Currency has been demonetized thrice in India. The first demonetization took place on 12 January 1946 (Saturday), the second on 16 January 1978 (Monday) and the third on 8 November 2016 (Tuesday). The study attempts to understand the meaning and causes of demonetization, the sector-wise impact of demonetization. The study also provides information on the positive and negative effects of demonetization on the Indian economy. This paper is descriptive in nature hence all necessary and relevant data has been taken from various journals, papers published from journals and websites. Books are also referred for theoretical information on the subject as required.
KEYWORDS: Currency, demonetization, digital, economy.