A Study on Issues of Demonetization with Special Reference to Small Businesses

“THE SECRET OF CHANGE IS TO FOCUS ALL OF YOUR ENERGY, NOT ON FIGHTING THE OLD BUT ON BUILDING THE NEW”-DEMONETIZATION EFFECT

The economy of a country plays a significant role in accelerating the pace of development of production and consumption activities. An economy is rightly defined a state of country or region in terms of production, consumption of goods and services and supply of money. In order that these activities are carried out smoothly one must ensure that the money flows freely in the market. To ensure improvement in productivity and consumption a master stroke decision was taken by our Prime Minister Sri. Narender Modi by tackling the issues of economy relating to destroying base of corruption in India, counterfeit currency in circulation and terror financing. Demonetization refers to an established practice in monetary policy to tackle black money circulation. It also includes the act of removing a currency unit of its status as legal tender where old currency is replaced with a new currency unit. It is rightly quoted by Raghuram Rajan that “We are neither Hawks, nor Doves. The Owl is traditionally a symbol of wisdom. We are doing what is necessary for the economy.”which means that demonetization will definitely bring out a turbulent change in working on economy where it might create initial problems but will lead to success in the coming years. Keeping the above points in mind the paper focuses on studying the reasons behind demonetization, factors leading to generation of black money, impact on key sectors, positive and negative effects of demonetization, impact on start up and small businesses. It concludes by giving suggestive measure for building a stable business.