"A Study of Effect of Demonetisation on Various Modes of Payments"

Abstract

"Demonetisation 2016" was not less than a socioeconomic and political shock for the nation. It barred 86.9% of the total currency in circulation comprising the highest denomination currency notes of an economy. The lower sections of the society suffered a lot and unorganised sector along with real estate and construction experienced hard times. The cash crunch was severe but was fruitful for organised sector. The immediate cost of demonetisation was gigantic as the implementation was on back foot. However it was expected that economy would reap benefits in the long run. It had a huge impact if compared with previous acts of demonetisation in 1946 and 1978. Dearth of cash forced people to go cash less or to purchase on credit. This led to boost in demand for the other modes of payment. This case has been prepared to project the impact of demonetisation on the overall Indian economy. This study also intends to discover the revolution in different modes of payment in India during monetary contraction. The analysis shows that demonetisation failed miserably and the sufferings weighed heavier then the benefits in the given interlude. Lately a positive attempt was made to mitigate the evils of the economy and turn it into cashless system. Government launched various schemes and policies to promote the digital transaction instead of cash-centric payments. However, because of remonetisation, the leap in electronic mode of payment got diluted gradually and came back to its normal level as before. Therefore, government needs to put further labour in the planning and structuring of economy to make it cash free and black free economy. The project objectives were realised with the help of exploratory and inferential research on the secondary information obtained from RBI official forum.

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