Demonetization refers to the Government's act of stripping certain currency denomination as legal tender. The old unit of currency is replaced with a new currency unit. It is an extreme step taken by government. The reason behind its implementation is that the money that is quenched can be “black money” and hence it is legitimately quenched so that the structure of the economy can be set straight. However, just like a coin has two sides, it has its own pros and cons. In this paper an attempt has been made to elucidate the impact of such a move on various sectors of the economy. The paper also gives an insight to the impact of Demonetization on other countries. The government of India took the bold step of demonetising Rs.500 and Rs.1000 notes and supplanted them with new Rs.500 and Rs.2000 notes. The overnight decision struck thunderbolt on the entire nation. A similar event took place in 1978 in which the then Prime minister of India, Morarji Desai, withdrew Rs 1000, Rs 5000 and Rs 10,000 out of circulation. The ultimate purpose of the withdrawal was to check the hoarding of black money.
Black money, Banking, Cash transactions, Demonetization, Digital payment
