Demonetization Period Research Articles

Demonetization and its effects on Indian economy

Indian government has taken a bold decision on note ban on 08/11/2016. Central government was a judicious, well-thought out and well-implemented step, and whether it would really eradicate all the existing black money. Here I have utilized the opinions of great expert on economics, financial economist and intellectual politicians. This study will help us to know about the positive and negative impact of note ban decision taken by Indian government. This study is purely based on secondary data, which is collected from news papers, magazines, websites from internet, some useful books related to topic etc. This paper entails the problems related to pre and post demonetization period and thereby to find out solutions and to provide suggestions in order to overcome the problem. Demonetization is the process of withdrawal of a particular form of currency from circulation. The purpose of the study is to compare and analyse the impact of demonetization on Indian economy during pre and post period. The older denominations must be replaced with the new ones. The findings of the study reveal that India will achieve a significant growth by adopting the demonetization strategy and will create a huge positive impact on the entire economy in a long run. This paper also shows that it was quick step taken by the government of India without any measures which people had to face a lot of consequences in standing in the long queues to exchange their older denominations.

Politics of Demonetization: Its effect on the Village Economy in India

The Government of India` s call for demonetization on 8th November 2016 banning Rs500/-and Rs1000/- notes was originally accepted as a positive step to discourage the black marketers and the rackets in hoarding to rule over the society. Unfortunately the long term effect of such a hurried decision became a boom to the agri-business based on soft cash. The agribusiness chain became the worst effected group. The chain included non-formal agricultural sector small earners in the agricultural field the farmers as the fragmented land holder and the producers thriving on the instant sale of their products and also those depending on middleman for the disbursement of funds and purchase of products for storage and dispersal of the same to the consumers` market for constant supply. Demonetization discouraged the middleman to put cash in the producing and disbursement. Thereby demonetization dismantled the overall economic chain of production and distribution resulting havoc in agro business market. The small farmers became the main victims of the circumstances. The banning of money economy on the one hand created scarcity in the families based on ancillary agro-production and it also hampered the family income of the rural farmers. Considering the boom in the village economy as an outcome of demonetization the present article makes an effort to gather firsthand information on the position of rural farmers and other non-formal rural occupation group as an outcome of demonetization announced by the Prime Minister of India. The focused area of the study include the selected villages in the northern part of West Bengal. They are rich in agro-based products run by the self-contended but marginal women farmers group thriving on export of their products to the Nepal Market. Their family males are involved in other ancillary employment like pendal making for marriages and other social gatherings running grocery shops and hawkers selling garments and cloths. The women in their families are involved in the varieties of occupation like working as Anganwari preparing mid-day mill working in the road side motels run by the Government (Pother Sathi ) and also working as a liaison of the Government Agriculture Department of the District through their Farmers` Club. The region marked as the second best agro-production area in West Bengal but their business thrives on cash transaction. Keeping in mind the PM`s speech on November 8th 2016 as a pro-poor program the present study focuses on the effect of demonetization on the poor women farmers by reaching out to the farmers families.The survey was done on December 2017 to observe the post demonetization effect in the reality scenario. Interestingly a similar survey was carried out by the researcher in 2015- 2016 and the field survey report was presented in the form of a research paper entitled ` the Role of Women in Agriculture ` in University of Vienna Austria under the International Sociological Forum in July 2016.This has enabled the researcher to gather knowledge on the economy of women community in the rural areas of North Bengal and a part of the West Bengal State. The life and living of these enthusiastic women community gave an impetus to the researcher to visit them and to learn the effect of demonetization in their life.2 The present paper is the outcome of the survey made by the researcher for the second phase in December 2017 during the post demonetization period.

Demonetisation and its Impact on Digitisation in India

The purpose of the study is to explore the impact of demonetization on digitization in India. On 8th Nov. 2016, Indian Government announced Demonetization by abolishing INR.500 and INR.1000 currency notes in the country with an objective to move towards a cashless economy besides check on black money and other corrective measures. In the short run, it led to temporary derailment of economy and inconvenience to general public. After initial teething problems like severe cash shortage, there was a steady growth in digital transactions when people have adopted to different digital payment modes like Online / Internet banking, ATM facilities, mobile wallets, usage of debit/credit cards and mobile banking, etc. The authors have taken secondary data from the RBI website from March 2015 to July 2018 to analyze the impact of demonetization on digitization. An event window of 20 months predemonetization and 20 months post-demonetization was taken for analysis. The month the event took place i.e., November 2016 was taken as month ‘0’. Descriptive Statistics, Correlation, t-test, and Trend Analysis were carried out to analyze the data. Based on the results extracted, the authors have concluded that there is a significant increase in the usage of various digital payment methods like RTGS, Retail Electronic Clearing, Prepaid instruments in the post demonetization period with a few exceptions like Paper Clearing, Mobile Banking and Debit cards.

A Study on the Financial Performance of SBI and ICICI Bank in Demonetization Period

Banks play an important role in the economic development of a country. Demonetization has affected many sectors of the nation, but banking sector was the most affected one because it served as a primary source via which the entire process carried out. It becomes necessary to understand the demonetization effect on banks performance. The present study is an attempt to evaluate the financial performance of two major Indian banks during demonetization period. These two banks are State Bank of India and ICICI Bank. The State Bank of India, popularly known as SBI is one of the leading public sector banks and ICICI is second largest private sector bank in India. The objective of the current study is to analyze the profitability of SBI and ICICI banks using ratios such as Net profit ratio, return on equity and return on assets. The study period is from the year 2014-15 to 2019-20.

Demonetization Impact on Liquidity of Large Corporates in India

This paper ‘Demonetization Impact on Liquidity of Large Corporates in India’ focuses on the changes in the Liquidity pattern of the companies’ in-order to cope up with the Business Risk that emerged due to the unforeseen Demonetization Policy of the Government of India. The study aimed at finding the performance of various sectors on liquidity parameters during pre and post demonetization period. The study covered the companies listed in NIFTY 50 over the period of 6 years from 2014-2019. The methodology used for analysis is the longitudinal study under descriptive analysis as it involves the repeated observations of the same variables over a period of time. As the paper focuses on the top companies listed, though companies faced the uncertainty during that particular period of demonetization, they bounced back at the earlier than the MSME companies. Some sectors like FMCG, Pharmaceutical were immune to demonetization as it has an inelastic demand in the market and demonetization created giant opportunities for the software sector as the country has been shifted towards digitalization. Found short-term implications for the cash-intensive sectors but in the long run it helps in the growth of the economy, which in turn will have a positive correlation with the growth of companies.

Impact of 2016th-year Demonetization on Banks in India

Demonetization is a monetary step in which a particular series of banknotes render invalid either by the government or by issuing authority of the nation to eliminate the undeclared income. It is a process in which certain units of currency notes will not be remains as legal tender. On November 8, 2016, government demonetize old ? 500 and ?1000 banknotes which were 86% (15.41) trillion in total circulation to curb the black money, wipe off the fake currency, and make a halt in corruption. This move shook all the corners of the economy in which the banking sector was significantly affected. It gave a positive impact on the financial statements of banks, as the deposits were increased, the net earnings of the bank were also increase. Therefore, the study has been conducted to throw the light on the impact of demonetization on banks, primary data have been collected for the of Pre and Post demonetization period.

The Impact of Media on Society: A Social Perspective on Demonetization

Our society is reflected through the media, which represents what society is like and how it functions. The sole medium that serves to keep people informed is media, whether it is written, electronic, or on the web. It also serves to amuse, educate, and inform the audience about current events. Our society's voice is now dominated by the media. A number of media platforms have brilliantly stirred the views of the younger generation and other segments of our society. The study's goal is to examine the media's involvement and efficacy throughout the demonetization process. The study's major goals are to look into the role of the media in informing people about the demonetization process and its consequences. The study will contribute to a better understanding of the role of the media in conveying information on significant problems and how individuals learn about current events. In Lucknow's South City and Eldeco neighborhood, a poll of 300 persons was held. The researchers devised a data gathering interview plan that took into account the function and type of media in raising public awareness. The convenience sampling method was used in the research investigation. The study focuses on media consumption patterns and behaviour throughout the demonetization period.

Impact of 2016th-year Demonetization on Banks in India

Demonetization is a monetary step in which a particular series of banknotes render invalid either by the government or by issuing authority of the nation to eliminate the undeclared income. It is a process in which certain units of currency notes will not be remains as legal tender. On November 8, 2016, government demonetize old ₹ 500 and ₹1000 banknotes which were 86% (15.41) trillion in total circulation to curb the black money, wipe off the fake currency, and make a halt in corruption. This move shook all the corners of the economy in which the banking sector was significantly affected. It gave a positive impact on the financial statements of banks, as the deposits were increased, the net earnings of the bank were also increase. Therefore, the study has been conducted to throw the light on the impact of demonetization on banks, primary data have been collected for the of Pre and Post demonetization period.

Demonetization and digitalization: The Indian government's hidden agenda

The Indian demonetizations of November 2016 came at an entirely new scale to those of January 1946 and January 1978. This time around, the Narendra Modi government's measures applied to 86.4% of the banknotes and coins in circulation, the equivalent to 11% of GDP. Much analysis has been undertaken on the demonetization. This has largely been critical because of its disastrous consequences on local populations and the most deprived among them. Our paper adopts a different angle: it argues that demonetization has had a key impact on the digitalization of payments. We use data from the Reserve Bank of India from 2014 to 2020 to show that the demonetization period brought about a decline in Automatic Teller Machines (ATM) withdrawals. It equally boosted the adoption of digital means of payments, via Point of Sale Terminals (POS) and mobile banking. Since October 2016, the number of POS transactions has risen almost threefold, while the number of ATM transactions has decreased by almost one-fifth. The current government's rhetoric is to promote digitalization as a means of both formalizing the economy and protecting the poor. Its claim is unfortunately highly debatable.

Determinants of digital finance in India

ABSTRACT Digital finance can act as a catalyst to promote the growth of financial inclusion. Since 2014, the Indian government has taken various steps to uplift the use of digital finance, one of them is demonetization. It was a major initiative by the government to move society towards cashless economy. In spite of large-scale demonetization overwhelming majority are not using digital finance in India. In this context, this study aims to evaluate the determinants and the impact of demonetization on digital finance and also whether demonetization has enhanced or reduced the pre-existing gender gap in terms of digital finance in case of India. Findings suggest that being a man, richer, more educated and older favours digital technology to avail financial services. The impact of education and income level on use of digital finance are more pronounced in post demonetization period (2017) than pre demonization period (2014). Results on gender gap have strongly proven this fact, but a positive gap still exits, implying women are still lagging behind than men.

An agribusiness perspective of demonetization in central region of the state of Gujarat in India

This paper aims at understanding the effect of demonetization announced in November 2016 on agribusiness subsystems, its effect on consumer purchasing criteria, and the problems that surfaced in rural areas to move towards digitalization. This research was exploratory in nature and so adopted an open-ended approach through interviews of 200 farmers selected from 20 villages of two districts; one economically progressive and the other economically backward, in central region of the state of Gujarat in India. Besides, 50 landless farm laborers, 12 input dealers, 20 wholesalers, 20 retailers, 4 each of processors, exporters, and logistic service providers operating in study area were also interviewed. The focus group discussions were also conducted. Secondary data were gathered from various government sources. Exploratory factor analysis was conducted to examine the consumer purchasing criteria. Garrett’s ranking technique was used to find the problems of moving to digital transaction. The production activity slowed down due to immediate cash crunch. Agriculture also suffered a setback. Socio-economic factors contributed strongly to the consumer purchasing criteria post-demonetization. The rural economy worked on local credit basis during the demonetization period. Delayed sowing was observed due to non-availability of inputs during initial days of announcement of demonetization. Farm labor suffered losses. Prices of perishables crashed. More bank accounts opened in rural area as dairy payments were made mandatory through electronic mode only. Infrastructural bottlenecks, complex e-banking language and lack of technical knowhow, etc., posed problems before the rural economy to go digital. Strong policy interventions were suggested to make digitalization more popular in rural areas. Removal of infrastructural bottlenecks was suggested to absorb the shock effects of announcements like demonetization.

Sentiment Analysis on New Currency in Kenya Using Twitter Dataset

Social media sites recently became popular, it is clear that it has major influence in society, and almost one third of the entire world are in social media. It became a platform where people express their feelings, share their ideas, wisdoms and give feedback of an event or a product, with help of new technology it gave us an opportunity to analyse these contents easily. Twitter being one of these sites, with full of people opinions, where one can truck sentiment express about different kind of topics, instead of wasting time and energy for long surveys, due to advance sentiment analysis we can now collect a huge data of opinions of people. Sentiment analysis was one of the major interesting research area nowadays. In this paper we focused Sentimental insight into the 2019 Kenya currency replacement. Kenya government has announced that the country currency is to be replace wıth new generatıon of bank notes, the government ordered the Kenyan citizen to return back the old 1000 shilling notes ($10) to bank by 1st October 2019, in a bid to fight against corruption and money laundering. Kenyans citizen expressed their reaction over new banknotes. We perform sentiment analysis of the tweets using Multinomial Naïve Bayes algorithm by utilizing data from one of the social media platform–Twitter and I have collected during this period of demonetization, 1122 tweets from twitter using web scrapper with help of twitter advance search.

Was India's Demonetization Redistributive? Insights from Satellites and Surveys.

On November 8, 2016, the Indian government abruptly demonetized 86\% of its currency in circulation in an attempt to reduce black money, corruption, and counterfeiting. Yet, 99\% of the currency was eventually returned to banks. We use both, regional and household data to examine the medium-term effects of this policy. Using monthly night-light data, we show that districts which experienced higher deposit growth during the demonetization period recorded higher levels of economic activity in the year and a half that followed. We estimate a one standard deviation increase in deposits is associated with about 4\% increase in district GDP per capita. We also show the districts that experienced large deposit increases from demonetization are generally poorer, or worse off, in several widely used measures of socio-economic characteristics. Using a longitudinal survey of household expenditures and incomes, we also show that poorer households had larger increases in expenditures and incomes in the following eighteen months.

Who Gained from India’s Demonetization? Insights from Satellites and Surveys

On November 8, 2016, the Indian government abruptly demonetized 86% of its currency in circulation in an attempt to reduce black money, corruption, and counterfeiting. Yet, 99% of the currency was eventually returned to banks. We exploit large regional variations in deposit growth as a result of demonetization to study the medium-term effects of this policy. Using night-light data, we show that districts which experienced higher deposit growth during the demonetization period recorded higher levels of economic activity in the year and a half that followed. We estimate a one standard deviation increase in deposits is associated with a 5% increase in district GDP per capita. Further, districts with larger rural population, agricultural and non-agricultural informal labor shares also recorded an increase in nighttime light activity. The results are also supported by household-level surveys on income and expenditures.

DEMONETIZATION IMPACT OVER BANKING LOANS & ADVANCES-A CASE STUDY

The demonetization footstep by the Government of India twisted complicated influences in the economy. Complete sectors of the economy had faced and produced mixed sensation results over the decision of demonetization. India’s financial services struggled with demonetization; on the other hand, demonetization affects utmost over the banking sector because it is substantial influenced services to transform money circulation in an Indian economy. Eradicating components of currency notes from circulation in an economy is demonetization. It is as the processes of components of money are denied the status of legal tender. Consequently, ceased currency notes will not be account as valid currency in an economy. The term ‘demonetization’ is an instrument to shrink Inflation, Black Money, Corruption and terror funding, this step discourages a cash dependent economy in India. Government of India drive towards demonetization has given a strong push to the popularity of digital banking and made helps with the alternative arrangements of e-banking and e –wallet to trade and commerce. Exploring the demonetization emergence in an economy and impact on banking services ecosystem dynamics, this study take an abductive approach anchored in over 4 years of case study data regarding. The present study foremost intention is to be analyzing the demonetization impact over banking loans and advances. In this regard the present study is to be examining the pre demonetization and post demonetization period

Do Households Care About Cash? Exploring the Heterogeneous Effects of India's Demonetization

The recent demonetization exercise in India is a unique monetary experiment that made 86 percent of the total currency in circulation invalid. In a country where currency in circulation constitutes 12 percent of GDP, the policy turned out to be a purely exogenous macroeconomic shock that affected all agents of the economy. This paper documents the impact of this macroeconomic shock on one such systematically important agent of the economy: the household. By construction, the policy helped households with bank accounts in disposing of the demonetized cash. We use a new household-level data set to tease out the effects of this policy on households with no bank accounts relative to households with bank accounts. Our results show that the impact of demonetization on household income and expenditure has been transient with the major impact being seen in December-2016. We find that households with no bank accounts experienced a significant decrease in both income and expenditure in December-2016. There is significant heterogeneity in the impact across households in different asset classes. We also show evidence of recovery of household finances whereby households were able to smooth out consumption during the post demonetization period. However, this recovery phase is associated with an increase in household borrowing from different sources, primarily for the purpose of consumption. In particular, informal borrowing (money lenders, shops) increased substantially during this period.

The impact of demonetization on Indian firms’ performance: does company’s age make a difference?

The main aim of this paper is to evaluate the impact of demonetization on Indian firm’s quarterly financial performance before and after demonetization period (March-December, 2017), and to find out if companies’ age helps to face financial disruption. Four variables, which are net sales, total income, net profit after tax, and earnings per share, were taken as proxies for analyzing the quarterly financial performance of 2,892 companies listed on Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and Calcutta Stock Exchange (CSE). Nonparametric test, particularly Wilcoxon Matched-Pairs Signed Rank Test and Kruskal-Wallis one-way analysis of variance, were applied in analyzing the data. Results reveal that there is a statistically significant difference between the financial performance before and after demonetization at 5% level of significance. It was also found that the decrease/increase in the financial performance of all the firms was affected by the demonetization process, irrespective of their ages. The findings could be useful for financial managers and financial consultants, as they would be able to focus on the issues that matter most at the time of financial disruption.

Role of Social Media Optimization in Digital Marketing with special reference to Trupay

Social media optimization has been used by many organizations in the recent years, after the growth of Internet, for enhancing the growth and profits of their business. This paper discusses some of the strategies of digital marketing adopted by Trupay after the period of demonetization in India.SMO (Social Media Optimization) can be defined as the process of increasing the popularity and awareness of the product in the minds of the people. It is basically a marketing tool which helps in the promotion, marketing and sale of the product. Digital marketing is the method of promoting a product or a brand using electronic media like Mobile marketing, E-mail marketing etc..

Adoption of digital payment systems in the era of demonetization in India

PurposeThis study aims to investigate the actual usage (AU) of digital payment systems by the consumers during the period of demonetization (from November 9, 2016 to December 30, 2016) in India.Design/methodology/approachThe conceptual frame work for this study is based on the unified theory of acceptance and use of technology (UTAUT 2) and innovation resistance theory. A total of 766 sample respondents were surveyed using a pre-tested questionnaire. The empirical validation of the framework and analysis was done using partial least squares (PLS)-structural equation modeling (SEM) technique.FindingsThe results suggest that the behavioral intention (BI) to use and innovation resistance (IR) affect the usage of digital payment systems. The relation between BI to use digital payment systems and the AU of digital payment systems is moderated by the stickiness to cash payments.Research limitations/implicationsThis cross-sectional study is limited by geographic constraints and highlights the AU of digital payment systems by using the UTAUT 2 and IR theory only during the demonetization period.Practical implicationsThis study offers valuable insights to the economists, policymakers and digital payment service providers regarding the usage of digital payment systems by consumers during demonetization.Originality/valueThis study assumes importance as it empirically examines the influence of BI and IR on the AU of digital payment systems during the demonetization period in India. This study empirically validates the moderating influence of stickiness to cash payments on the AU of digital payment systems.

The Impact of Data Mining Techniques on the Indian Banking System

A definite transition away from the current post-industrial civilization towards the "Knowledge - based society" is being brought about by the influence of the "information Revolution" that is shaking the sphere. The banking and finance sector which consists of banks, financial firms, and other providers of financial services, is increasingly adopting new ICT developments (ICT). ICT adoption by banks has clearly benefited the banks in the form of improved customer service, reduced transaction expenses, a larger variety of delivery options and goods, etc. All banks are using fintech (Fin Tech) more and more. India particularly has experienced a period of demonetization (DeMo) as of November 8, 2016. Banks in India support contactless payments and digital banking in this contemporary DeMo age, and they are increasingly implementing fintech. There is intense competition in the financial system between individual banks and bank groups as a result of the digital take on elements place in the Indian economy as a whole and the banking industry in particular. The Next Generation of Private Banking Institutions (NGPSBs) is quickly eroding the market share held by Public Sector Banks (PSBs) (NGPBs). Using ICTbased solutions can help banks stay competitive in an environment where industry competition is on the rise. In the ongoing DeMo era in India, this study examines the implications of information mining technologies for improved competition, especially in conventional banking institutions.