Impact of Demonetisation on Indian Economy

Trinity Journal of Management, IT & Media (TJMITM)
Year: 2017 (Jan-Dec), Volume: (8), Issue. (1)
First page: (12) Last page: (18)
Online ISSN: A/F
Print ISSN: 2320-6470

Impact of Demonetisation on Indian Economy
Shekhar Mishra1 and Dr. Sathya Swaroop Debasish2

1Asst. Professor, Department of Business Management, C.V.Raman College of Engineering. Bhubaneswar
2Associate Professor, Department of Business Management, Utkal University, Bhubaneswar.
Corresponding author email id:

13 -04-2017


Online Published:

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India has amongst the highest level of currencies in circulation at 12.1% of GDP. Cash on hand is an estimated at around 3.2% of household assets, higher than investment in equities, or roughly around $ 220 billion. A significant portion of the household cash on hand is generated by economic transactions going unreported to tax authorities earns the name of black money and becomes a major constituent of parallel economy.. Demonetisation is considered to be a major step towards eliminating the menace of black money and cause a debilitating impact on parallel economy. The present paper endeavors to evaluate both short run and medium term impact of demonetisation on Indian economy. The paper elucidates the impact of the move taken by Government of India on credit availability, spending, level of activity and government finances.


Demonetisation, Black Money, Parallel Economy, Household cash