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Does Demonetisation in India Achieve its Objectives?

Author

Listed:
  • Azeez N.P. Abdul

    (Department of Economics, Aligarh Muslim University, India)

Abstract

Subject and purpose of work: T he d emonetisation e xercise i n I ndia a imed t o t ackle t he problems of black money, fake currency, corruption, and terror funding. The drying-up of cash due to demonetisation initially led to a significant increase in digital payment methods. However, large underprivileged informal Indians still prefer cash for their daily needs. The restoration of currency in circulation and increasing cash–to–GDP ratio in the following years questioned the success of digitalisation. Demonetisation has been noted to increase the tax base, tax collection and taxpayers. But this does not compensate for the negative impacts of demonetisation on the economy. Therefore, this paper tries to answer the question whether all of the stated goals will be achieved.

Suggested Citation

  • Azeez N.P. Abdul, 2022. "Does Demonetisation in India Achieve its Objectives?," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 15(3), pages 336-350, September.
    • Handle: RePEc:vrs:ecoreg:v:15:y:2022:i:3:p:336-350:n:3
    DOI: 10.2478/ers-2022-0023
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    References listed on IDEAS

    as
    1. Gabriel Chodorow-Reich & Gita Gopinath & Prachi Mishra & Abhinav Narayanan, 2020. "Cash and the Economy: Evidence from India’s Demonetization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(1), pages 57-103.
    2. Amartya Lahiri, 2020. "The Great Indian Demonetization," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 55-74, Winter.
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    More about this item

    Keywords

    demonetisation; counterfeit currency; black money; digitalisation; cash-to- GDP ratio;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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