Impact of demonetization on Indian economy: An analytic view

Demonetization in Indian economy seems to be very harsh as, common man of the rural and urban area, small shopkeepers, small traders, artisans, daily wage workers, small households, small traders, small scale manufacturers have suffered more and will suffer till circulation of currency notes resumes to normal in four to five upcoming months. The rural economy mainly the agriculturists have suffered with dual impact as, their sale of Kharif crop could not get them profit and the sowing of Rabi crop has got affected. The effect on rural economy will affect the overall productivity of the agriculture sector in the coming year. The cashless transaction has been promoted by the government but, it will take years to develop this skill in rural population and in semi-urban and in common commuter of the urban areas. The condition will improve in near future with the gradual transformation of Indian economy from cash transaction to cashless transaction. This transformation of the economy will increase liquidity with the banks, feasible tax system, increased revenue collection, more transparency in economy, increased public expenditure, more welfare of the society, lower rate of interest, more capital available for funding, enhanced rate of investment by the government and by the industrialists. In long term this will improve the economy bring, more transparency, less regional disparity, higher rate of growth of the economy.