A Study on Socio Economic Effect of Demonetization in India
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. Of this cash, 87% is in
the form of Rs 500 and Rs 1,000 notes or roughly Rs 14 lakh crore ($190 billion). Demonetization is a process by which a
series of currency will not be legal tender. The series of currency will not be acceptable as valid currency. The
demonetization was done in Nov 2016 in as an effort to stop counterfeiting of the current currency notes allegedly used for
funding terrorism, as well as a crackdown on black money in the country. Demonetization is a generations’ memorable
experience and is going to be one of the economic events of our time. Its impact is felt by every Indian citizen.
Demonetization affects the economy through the liquidity side. Its effect will be a telling one because nearly 86% of
currency value in circulation was withdrawn without replacing bulk of it. As a result of the withdrawal of Rs 500 and Rs
1000 notes, there occurred huge gap in the currency composition as after Rs 100; Rs 2000 is the only denomination.
Keywords- Demonetizations, Indian Economy, Currency Notes, Black Money, Govt. Of India, Modi Government