Each in the paper “Demonetization and itsEach in the paper “Demonetization and its

Each policy has its own cost and
benefits, same is the case with demonetization as well. There is a positive
expectation regarding this step as it will act as a tool to curb out
corruption, fake money and terrorism, but again that outcome is dependent upon
the proper execution of the policy.


1.    Dr Nilam Panchal &
Minakshi Singla in the paper “Demonetization and its impact on
Indian Financial Markets” is focused on the demonetization and its impact on
financial markets, capital market and money market which includes mutual fund,
life insurance, NBFC, foreign currency, stock index and stock prices; bank’s
credit growth, interest rates, payments methods, role of cooperative banks, negative
involvement of Jan-dhan accounts before, during and after demonetization. This
research focused on understanding perception of Bank employees towards
demonetization understanding the post demonetization impact on various
financial sectors.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now


2.    Dr Ranjana Sahu in the paper “Demonetization and its impact
of Indian Economy” attempts to gauge
the impact of demonetization on overall economy when nearly half the economy
runs entirely on the basis of currency transactions. This paper gives a clear
picture of changing scenario from swapping of currency to swiping of cards,
switching over to click from brick and mortar bank and also attempts to analyze
whether demonetization was successful in achieving its objectives. This paper
throws light on challenges and opportunities post demonetization in India. This
paper gives a critical analysis of role of financial system in the success of
demonetization in India.



Insight, (2016) stated that this step was taken for three
motives viz; to remove Parallel economy, terror financing and circulation of
fake currency. This study found that this step will keep a check on black money
that is kept in cash and forms only 4% of the total black money, rest the black
money is kept in the form of land, buildings, gold and in abroad. So this
policy will have a limited scope only.


Ramdurg & CS, (2016) were also of the view
that the tool of Demonetization can be used to eradicate parallel economy. Demonetization
is one of the big steps initiated by Government in addressing the various
issues like black money, counterfeit currency, corruption, terrorism etc.
History of demonetization in India and around the world is addressed. Lesson
from historically demonetization guides us how to redefine economy of country
by overcoming the earlier causes for failure. Demonetization obliviously brings
many inconveniences to common people but it is for only short term. However the
long term benefits of demonetization overrides the short term challenges.
Government initiatives like Income Declaration Scheme 2016, Black Money
(Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015, Joint
Declaration of AEOI between India and Switzerland to address black money etc.
in redefining Indian economy are to be appreciated and these initiatives leaves
their footsteps as part of history.



Tax Research Team, (2016) analyzed the short
term and medium term impact of demonetization in the economy. The
demonetization done by the government is a large shock to the economy. The
short term impact of this step can be assessed as how much currency is replaced
as compare to the extinguished currency from the circulation. This study stated
that it is considered that this process will help to abolish black money. Black
money is unauthorized illegal money generated with the help of illegal resource
and is undisclosed to the government. Demonetization will be help full in
eradicating black money, as this process will help to disclose the hidden
funds, demonetization will help in reducing the hidden cash. Moreover current
step of demonetization is taken after initiating the process of making identity
of people in the form of Aadhar card, secondly by providing a better platform in
the form of opening bank account under Jan-Dhan Yojna. So it seems like this
step would be beneficial in curbing black-money out of economy.


Kaur, (2016) also illustrated mostly
all the positive impacts of demonetization. This study stated that this step
will help in regulating the prices of real estate, will help in reducing
interest rate, and will keep a check on inflation besides it will show a
negative impact on GDP for short time duration. This step will have positive
impacts on sectors like Banking and Infrastructure in the medium to long term
and might have negative impacts on FMCG Consumer Durables, Luxury items, Gems
and Jewellery, and Real Estate in medium term. This move can lead to improved
tax compliance, better fiscal balance, lower inflation, lower corruption,
complete elimination of fake currency and another stepping stone for sustained
economic growth in the longer term.


Sabnavis, Sawarkar, & Mishra, (2016) in his research paper was of
the view that government will reduce the money supply in the economy initially
but gradually it will get its pace back and supply of money will be normal. Due
to decrease in money supply purchasing power of consumers will be less, there
will be decrease of demands of various commodities, due to decrease in demand
prices of various commodities will tend to be go down and it will hamper the
various economic activities in many sectors like gold, luxurious items, real
estate and many more industries where there is need of huge funds to do
transactions. This process will ultimately reduce Gross Domestic Product (GDP)
in the economy. But this study stated that these are the transitory effects
ultimately in the long run this step will help to reduce the level of
counterfeit currency in the economy. Government will be benefitted by this step
as this step will help in of reducing liability and increasing finances for the
government. With this step Government will be able to get money to finance
their expenditures without borrowing from the markets. This study stated that
this step will be beneficial for sectors like banking and infrastructure for
medium time period; negative impacts on gems and jewellery, consumer durables,
luxurious items and real estate in short to medium time duration. But this step
will help to improve tax implications, lowering inflation, lowering corruption,
black money and bringing growth and development in the economy in the long time


Samal, Kishore C,
in his paper, “Chasing Black Money in India” gives a history of the various
measures taken by the Government of India to mop up black money since 1946 such
as demonetization, voluntary disclosure schemes and bearer bonds in Journal of
Indian School of Political Economy, April-June 1992


Tripathi Ashish K
in the paper, “Demonetization challenges for Rural India” points out that demonetization
is good but our financial system should be ready to change. Also it would be
too early to come to any conclusion regarding its success or failure of this demonetization
in Indian Economy as every transition takes time, so will demonetization.


10. Mukhrjee
et al. (November 2016)
in his research paper studied about
the impact of the present government move for demonetization on the credit
availability, government finance, spending and levels of various activities.
The researchers stated that in a very short period there would be more serious effect
on persons earning income in cash as well as spending in cash while impact will
be up to a lesser extent on those earnings in non-cash form but spending in
cash. Each sector backing demand by cash along with the real sector especially
the unorganized one will much adversely effected in very short run time. In
case of short term effect having complete replacement, an immense strengthening
of informal sector credit market would be seen in the rural market and there
would be adverse effect on construction sector. The medium term impact would
produce results in terms of enhancements in deposits in the economy.

11. Mohd.
(November 2016)
studied about the significance as well as challenges of demonetization of
currency notes. Secondary data was used for this study collected from various
newspapers as well as websites. The researcher concluded through the study made
that no doubt this move was going to disturb the routine life of ‘Aam Aadmi’
(common man of India) influencing largely the unorganized sector including
organized sector up to a limited extent but the real consequences of move will
have bigger implications on the Indian economy as a whole in the long run.

12. Sunita
(September 2014) in
her research study attempted to get insight about the reasons as well as
measures adopted by the government on demonetization that was implemented in
Indian context. It was a conceptual study based on secondary sources. She
concluded that the enhancing trade deficit, 1965’s war between India and
Pakistan, gulf war, political as well as economic stability, dwindling foreign
exchange reserves, withdrawn of FII’s (Foreign Institutional Investors) and
strengthen of dollar were the key reasons behind the move for demonetization by
the government in India and the measures adopted by the government included
imposition of quantitative restrictions, provision for export subsidies,
establishment of dual exchange regime, adoption of floating exchange rate
system, increase in FII’s limit, enhancement of ceiling up to a limited time
frame, use of some proportion of borrowed funds overseas for the domestic
expenditure, withdrawn of rebooking of forward contracts post cancellation and
reduction of NOOPL (Net Overnight Open Position Limit).


13. Partap
and Virender ( December 2016)
studied about the impact of demonetization on Indian economy and concluded that
a disruption was held in the current liquidity situation as households were
more likely to get affected by the note exchange terms laid by the government.
It is important to note that a significant percentage of the Indian workforce
is employed in this sector, which is likely to be affected by immediate
liquidity issues. Overall, negative impact on disposable income is expected
along with likely disruption in the consumption patterns of the general
populace. It is estimated that there will be a negative GDP impact in the
current quarter as consumption gets a shock in the immediate term. However,
quantum and degree of this impact cannot be ascertained at this time.