From demonetisation to digitization of Indian economy: A road ahead

• Author 1: Ashutosh D. Gaur • Author 2: Dr Jasmin Padiya

• Doctoral Scholar • Associate Professor
• School of Doctoral Research and • GLS University, Ahmedabad
Innovation • Jasmin.padiya@glsuniversity.ac.in
• GLS University, Ahmedabad
• +919824052434
• me@ahutoshgaur.co.in
• +917567623100

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Outline

• Introduction

• Literature Review

• Objectives

• Methodology

• Results

• Conclusion

• Managerial & Public Policy Implication

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 Introduction

“We took a key step to

help the honest citizen of
India to defeat the
menace of black
money”.
-Narendra Modi
Prime Minister of India

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Literature Review

• Demonetization impact the Indian economy: A descriptive study. - Kotnal, D. J.

(2017; ) In this study Author analysis, the currency system in India and evaluate effect and
impact of demonetisation in Indian economy.
• Sentiment analysis of demonetization of 500 & 1000 rupee banknotes by Indian
government - Prabhsimran Singha, R. S. (2017) The aim of this paper was to analyse
the effect of the demonetization policy implemented by the Indian government by using
the concept of sentiment analysis. The result of our analysis shows that a large share of
Indian people was happy with this policy. During the initial days, the sentiment was more
towards the negative side as the common man had to suffer many hardships. Ultimately,
as the new banknotes were made available, the overall sentiment of the people became
positive

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Objectives

1. To analysis, demonetization Impact the Indian Economy.

2. To review the Pros & Cons of Digitalization of the economy in India.
3. To study the impact of demonetization on cashless transactions.

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Research Methodology

• As the research paper is of conceptual and review nature, the researcher

has applied exploratory research design by using varied secondary data
availed from the secondary data sources. Based on the secondary data
and review, the researcher has reported on various emerging trends and
issues and challenges in demonetisation to the digitization of Indian
economy.
• A research report, journal, and newspaper article from eminent writers
have been reviewed.

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 Findings

Figure: Value of High Denomination Notes in Value of All Notes in Circulation (in%)
Source: Author’s construction based on data extracted from RBI (2016), Handbook of Statistics of Indian Economy 2015-16.

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Findings

Per capita GDP and Currency in Circulation as Percentage of GDP ‘ Source: Author’s construction Extracted from BIS, Statistics on Payment, Clearing and settlement System’, table1 and table 2, available at
http://www.bis.org/cpmi/publ/d155.htm

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Result & Discussion

• Demonetisation in such a huge extent and introducing new currency is a

gigantic process with a massive task.
• There is two vital part in the strategy of India’s demonetisation that require
study. First the scale of demonetisation and second the time frame for the
completion of the procedure.
• The demonetisation of the two highest currency notes was accompanied
by the introduction of new series of Rs500 notes and the currency of an
even higher denomination- the Rs2,000 currency note. It is also likely that
over time the stock of Rs2,000 not brought down by winding down the
printing of this currency.
• Digitisation of monetary transactions has been in progress for more than a
decade now. The new impetus to digitation after demonetisation.

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Result & Discussion

• Digitization should percolate to grass root levels i.e. villages and to

farmers so that real transformation of the economy will take place.
• The government of India had made provision a huge amount of revenue in
the union budget for computer literacy this is important step of the Digital
economy. Digital India can also play a significant role in digitalization of
economy.
• The aim of demonetisation is attack black money. This objective of curbing
black money will not be achieved only with demonetisation drive.
• The government must address the Gold and Real estate sector to defeat
black money.

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Result & Discussion

• A huge amount of black money is in the foreign bank which is tax havens
like Mauritius and Cyprus a strong action is required on this front also.
• There is an argument that India’s large population live in a village so e-
wallet and digital economy cannot do many transformations.
• The answer for the IT users in India is much larger than the population of
develop country there for e-wallet has a great future in India.

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 “People who change after change
Conclusion will survive
• This quote of prime
minister is very important in People who change with change will
this context. This show the
determination and a succeed
political will to change the
entire structure of the
economy and to build People who cause the change
cashless India.
• Demonetisation may hit
will lead”
the GDP growth of the
country for two financial - Narendra Modi
quarters, but the result will Prime Minister of India
be positive

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Managerial & Public Policy Implications

The public policy

To achieve the vital
implication is the
objective of
country will move
demonetisation
toward cashless
Government of
economy there
India i.e. cashless
right legal
economy should
Managerial Implication of framework is
required for digital
incentivise the
digital currency.
demonetisation that every business transactions.
man must have a digital platform to The policymakers
Last but not the
least, policy makers
should increase the
do the business transition. usage of digital
should accelerate
initiatives against
currency. It should
gold & real estate
be the broad base
sectors to liberate
to promote
the country from
financial
the dark shadow of
inclusiveness.
Managerial Implication black money.

Public Policy Implication

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 Thank you

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