Understanding Demonetization in India, livre ebook

Demonetization has created a severe macroeconomic shock. The measure was humungous in scale and led to a sharp contraction in money supply for a short period. Although demonetization’s proponents have contended that it would cleanse the economy of black money and make transactions more formal and digital, its implementation certainly could have been better. The effects of demonetization on the Indian economy are debatable and will vary by sector. Its effectiveness will be talked about and studied by economists and policy makers for decades to come.

Demonetization has made only a minor dent in the GDP. It has helped to bring more people into the tax net and has reduced the size of the informal economy. With the increased use of digital payments, economic transactions become recorded. This book examines the very concept, history, critique, and impact on the overall economy and black money, the move toward less-cash economy and digitalization, government–RBI relations, along with an assessment of two years of demonetization. It would be prudent for the government to focus more on proper institutional reforms to address the issues originating from demonetization.

Preface...................................................................................................ix

Acknowledgments....................................................................................xi

Chapter 1 Introduction to Demonetization........................................1

Chapter 2 Functions and Importance of Money.................................9

Chapter 3 Demand for Money.........................................................21

Chapter 4 Supply of Money..............................................................29

Chapter 5 Relationship between Money and Prices...........................39

Chapter 6 Demonetization in Other Countries................................45

Chapter 7 History of Demonetization in India.................................55

Chapter 8 Recent Demonetization of Indian Currency.....................61

Chapter 9 Demonetization in India: A Critique...............................79

Chapter 10 Impact on Indian Economy.............................................91

Chapter 11 Demonetization and Black Economy.............................109

Chapter 12 Demonetization as a Move to a Less-Cash Economy......127

Chapter 13 Relation between Union Government and the Reserve Bank of India....................................................139

Chapter 14 The Ongoing Debate and Political Economy..................149

Chapter 15 An Epilogue: Two Years Later.........................................157

References............................................................................................163

About the Author.................................................................................171

Index..................................................................................................173