IMPACT OF DEMONETIZATION IN INDIA

Abstract

With the announcement of PM Narendra Modi that the denomination of Rs. 500 and 1000 would cease to be the legal tender from 9th of Nov, 2016, the whole country was taken aback. This decision generated unprecedented excitement and sensation in the whole country in particular and the world in general. The government’s decision to demonetize paper currency notes of Rs. 500 (US$7.40) and Rs. 1,000 (US$15) denomination of the Mahatma Gandhi series rendered the legal tender ineffective in the whole country. It is worth taking into consideration that such notes accounted for 86% of the total currency in the system. When this news was broken by the P.M. over the television, social media got inundated with messages and information of all sorts ranging from welcoming the decision to predictions of doomsday. Some affected people began counting the trash they had heaped for years legally or illegally.