Measuring demonetisation: a path towards the cashless India

Abstract

The objective of the paper is to analyse the immediate impact of demonetisation on the Indian economy along with analysing the barriers in moving towards cashless economy and investigates the influence of demonetisation towards cashless economy. Scale was constructed for measuring effectiveness and impact of demonetisation on Indian economy. The responses were asked only from the people who were earning an income from any source. Exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were conducted on respondents followed by the structural equation modelling and path analysis. Results suggested that demonetisation's main motive was to lay the path for cashless India. It was also concluded that IT enabled services, payment portals are the major gainers during this phase and traditional banking was negatively impacted by demonetisation. Impact on social issues has also been observed as there is reduction in black money, more disclosure of income, more transparent business dealings, less holding of huge amounts of cash in hand and others. There has also been an indirect effect on cashless economy via economic concerns from the demonetisation.