Demonetization: Opportunities and Challenges

Abstract

On November 8, 2016 evening an economic surgical  strike like decision of Prime Minister Mr. Narendra Modi hit the  nation of withdrawing the 1000 and 500 rupee bills with  immediate effect from 12.00 of mid night and time bound  surrender of the said notes in circulation. The demonetization  decision of the NDA Government brought a hue and cry from  many including political parties, economists, policy makers,  development agencies, civic societies and individuals among  others. In his address to nation, Prime Minister Mr Modi strongly  advocated in favour of the decision for the betterment of the  nation. Initially, demonetization caused many hardships to the  people of this largest economy living in cash economy; however it  would have positive impact in the long run. People across  professions and status have extended their support of the  Government with a hope that demonetization would be an  effective in combating corruption, promoting transparency in  business practices, and hammering on the shadow economy and  black money. Moreover, the digital programme under financial  inclusion will get a big boost in promoting direct transfer of  benefits of Government sponsored schemes to poor. However,  there are many challenges in making this big Indian cash  economy to cash less digital market. In these backdrops, the  exiting paper will discuss the opportunities and challenges of  demonetization.