Effect of Demonetization

on Pharmacy Sector

Made By Urmisha Brahmkhatri , Roll No .

13
- Hiral Mehata , Roll No. 45
- Chirayu Olkar ,Roll No. 48
- Prakash Upadhaya ,Roll No. 81
- Abhay Singh ,Roll No. 84
What Is Demonetization ?
The demonetization of 500 and 1000 ,banknotes was a policy enacted by
the Government of India on 8 November 2016, ceasing the usage of all 500
(US$7.40) ,1,000 (US$15) banknotes of the Mahatma Gandhi Series as
Legal Tender in India after 9 November 2016
The announcement was made by the Prime Minister of India Narendra
Modi in an unscheduled live televised address at 20:15 (IST) on 8
November. In the announcement, Modi declared that use of all 500 and
1,000 banknotes of the Mahatma Gandhi Series would be invalid after
midnight of that day, and announced the issuance of new 500 and 2,000
banknotes of the Mahatma Gandhi New Series in exchange for the old
banknotes. However, the banknote denominations of 100, 50, 20, 10 and 5
of the Mahatma Gandhi Series remained legal tender and were unaffected
by the policy.
The government claimed that the demonetization was an effort to stop
counterfeiting of the current banknotes allegedly used for funding terrorism,
as well as a crack down on black money in the country. The move was also
described as an effort to reduce corruption the use of drugs, and smuggling .
 However, in the days following the demonetization,
banks and ATMs across the country faced severe cash
shortages. with severe detrimental effects on a
number of small businesses, agriculture, and
transportation. People seeking to exchange their
notes had to stand in lengthy queues, and several
deaths were linked to the inconveniences caused due
to the rush to exchange cash. Also, following the
announcement, the BSE SENSEX and NIFTY 50 stock
indices crashed for the next two days.
The move received support from several bankers as
well as from some international commentators. But it
was heavily criticized by members of the opposition
parties, leading to debates in both houses of
parliament and triggering organized protests against
the government in several places across India.
Major After Effect of
Demonetization
1. Cash Crunch
2. Stock market crash
3. Transportation halts
4. Agriculture
5. Banking
6. Business
7. Income tax raids and cash seizures
8. Seizures of new Rs. 2000 notes
9. Railways
Pharmacy in India
The pharmaceutical industry in India ranks 3rd in the world terms of volume
and 14th in terms of value. According to Department of Pharmaceuticals,
Ministry of Chemicals and Fertilizers, the total turnover of India's
pharmaceuticals industry between 2008 and September 2009 was US$21.04
billion. Hyderabad, Mumbai, Bangalore and Ahmadabad are the major
pharmaceutical hubs of India. The domestic market was worth US$13.8 billion
in 2013.
Role of Pharmaceutical Industry in India GDP-Facts
The Pharmaceutical Industry in India is one of the largest in the world
It ranks 4th in the world, pertaining to the volume of sales
The estimated worth of the Indian Pharmaceutical Industry is US$ 6 billion
The growth rate of the industry is 13% per year
Almost most 70% of the domestic demand for bulk drugs is catered by the
Indian Pharmacy Industry
The Pharmacy Industry in India produces around 20% to 24% of the global
generic drugs
The Indian Pharmaceutical Industry is one of the biggest producers of the
active pharmaceutical ingredients (API) in the international arena
The Indian Pharmacy sector leads the science-based industries in the country
The pharmaceutical sector has the capacity and technology pertaining to
complex drug manufacturing
Around 40% of the total pharmaceutical produce is exported
55% of the total exports constitute of formulations and the other 45%
comprises of bulk drugs
The Indian Pharmacy Industry includes small scaled, medium scaled, large
scaled players, which totals nearly 300 different companies
There are several other small units operating in the domestic sector
Pharmaceutical Industry in India-Growth
As per the present growth rate, the Indian Pharmacy Industry is
expected to be a US$ 20 billion industry by the year 2015
The Indian Pharmaceutical sector is also expected to be among
the top ten Pharmacy based markets in the world in the next ten
years
The national Pharmacy market would experience the rise in the
sales of the patent drugs
The sales of the Indian Pharmacy Industry would worth US$ 43
billion within the next decade
With the increase in the medical infrastructure, the health
services would be transformed and it would help the growth of
the Pharmacy industry further
With the large concentration of multi national pharmaceutical
companies in India, it becomes easier to attract foreign direct
investments
The Pharmacy industry in India is one of the major foreign direct
investments encouraging sectors .
Research Methodology
Objectives Of Research:
To gain familiarity with new insights into a phenomenon that is
what is the effect of demonetization on pharmacy industry at large .
To accurately portray the characteristics of a particular individual,
group, or a situation (how different size of shops ,level of income
are reacting )
To examine the correlation between two variable.
By How much sale volume was effected .
Amount of inconvenience caused to both the owner of shops and
customers .
By how much has the sale volume gone down .
What other method of payment have you adopted ?
Type Of Research Methodology
followed
Followed Method - Descriptive research
Descriptive research consists of surveys and fact-
finding enquiries of different types. The main
objective of descriptive research is describing the state
of affairs as it prevails at the time of study. The term
ex post facto research is quite often used for
descriptive research studies in social sciences and
business research. The most distinguishing feature of
this method is that the researcher has no control over
the variables here. He/she has to only report what is
happening or what has happened.
Sampling Method
Sample Frame - Sampling frame is the source material from
which a sample is drawn. In our Research the sample
Frame is Medical/ Phramacy shops spread across Vadodara .
Method Followed -
Convenience sampling Convenience sampling (also known as availability
sampling) is a specific type of non-probability sampling method that relies
on data collection from population members who are conveniently
available to participate in study
Tools used for the Result
1. Central Tendency - The tendency for the values of a random
variable to cluster round its mean, mode, or median.
2. Regression and correlation - Analysis involves identifying the
relationship between a dependent variable and one or more
independent variables
3. Standard Deviation - A quantity expressing by how much the
members of a group differ from the mean value for the group.
4. Kurtosis - The sharpness of the peak of a frequency-distribution
curve.
5. Skewness - Skewness is a measure of the asymmetry of the
probability distribution of a real-valued random variable about its
mean
Result of Survey
1. Number of Medical Shops Visited ?

Governmen
t Shop
Medium
Small 3 2 Size Shop
Size - 30
Shop - 30
4

Large size shop - 12

Total shop Visited - 81

2. What the Shop owner feel of
Government Move of
Demonetization ?
Good Idea 51 Shop owner ; P(A) - 0.629
Bad Idea 15 Shop owner ; P(B) - 0.185
Not Sure 15 Shop owner ; P(C) - 0.185

Not Sure ; 19%

Bad ; 19%
Good ; 63%
3. Opinion of Shop owner on Allowing Government
Medical stores/hospital to accept old notes ?
Good 35 Shop owner ; P(A) - 0.432
Bad 26 Shop owner ; P(B) - 0.320
Not Sure 20 Shop owner ; P(C) - 0.2469

Not Sure ; 25%

Good; 43%

Bad; 32%
4.Was the Implementation of Demonetization
conducted in a Phased Manner ?

Answer -Yes = 56 Shop owner ; P(A) - 0.691

- No = 25 Shop owner ; P(B) - 0.308

No; 31%

Yes; 69%
5. Demonetization has Disrupted your regular
business dealing ?
(A) By - 10% (E) By - 100 %
(B) By - 25%
(C) By - 50 %
(D) By - 75 %

Central Tendency:
Mean 29.085
Median 25
Mode 10
Kurtosis : - 0.425
Standard Deviation :22.38
Skewness : 0.944
6. Effect of demonetization on sale of
medicine ?
(A) By - 10% (E) By - 100 %
(B) By - 25%
(C) By - 50 %
(D) By - 75 %

Central Tendency:
Average 28.170
Median 25
Mode 10
Kurtosis : - 0.15
Standard Deviation : 21.67
Skewness : 1.04
7. Purchasing Power Gone Down ?
(A) By - 10% (E) By - 100 %
(B) By - 25%
(C) By - 50 %
(D) By - 75 %

Central Tendency:
Average 23.41
Median 10
Mode 10
Kurtosis : 1.23
Standard Deviation : 17.91
Skewness : 1.41
 Relation Between 5 & 6
The Correlation Exist Between the to which is 0.690 .
What can we Say from it ?

Effect on sale volume

80
70
60
50
40
30
20
10
0 Business
0 10 20 30 40 50 60 70 80
Disruption
Relation Between 5 & 7
The Correlation Exist Between the to which is 0.384
What can we Say from it ?

Purchasing Power
80
70
60
50
40
30
20
10
0
0 10 20 30 40 50 60 70 80
What to you think of the government 's move of introducing 2000 Rs note ?Is it
good for your business ?(Large Shop )

Yes it is good For business 40 ; P(A) - 0.493

No it is not good for business 41 ; P(B) 0.5061

Yes No

51% 49%
Level of customer effected ?
Poor People 13 ; P(A) - 0.1604
Middle level people 21 ; P(B) - 0.259
Both Poor and Middle level people 38 ; P(C) - 0.469
Rich level people 9 ; P(D) 0.111
Poor Middle Both Rich

11% 16%

26%
47%
Mode of payment opted
instead of cash?
A. Card 29 ; P(A) 0.358
B. Cheque 30 ; P(B) 0.370
C. Online 21 ; P(C) - 0 .271

Sales

online ; 27%
Card; 36%

cheque; 37%
What we can conclude from the
survey ?
By surveying different medical shops ,we can conclude that as an
impact of demonetization ,
1. Rates of Medicines will be cheaper .
2. More Regulated Market .
3. Implementation of new rules and regulation .
Statistically we can conclude that
1.The purchasing power of the shop keepers has been reduced
significantly ,there is still a scope for getting better results in
upcoming periods .
2. Increase in online and non cash payment method is there ,which
can lead to more transparent system .
3. Poor and Middle class of people are being the most affected .