Does Demonetisation in India Achieve its Objectives?

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.

Keywords

• demonetisation
• counterfeit currency
• black money
• digitalisation
• cash-to- gdp ratio
• g10
• g33
• e12
• e42