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ON RETAIL INDUSTRY
BY :
CHUTIYA KUMARI
DEMONETIZATION?
Demonetization is the act of stripping a currency unit of its status as legal tender. It
occurs whenever there is a change of national currency: The current form or forms of
money is pulled from circulation and retired, often to be replaced with new notes or
coins. Sometimes, a country completely replaces the old currency with new currency.
To combat Inflation
1 fully adopting the gold standard. Several coins,
including two-cent piece, three-cent piece, and
half dime were discontinued.
To combat Corruption and Crime(counterfeiting,
tax evasion) An example of demonetization for trade purposes
occurred when the nations of the European
To discourage a cash dependent economy
2 Union officially began to use the euro as their
everyday currencies in 2002. The old national
currencies were demonetized.
To facilitate trade
DEMONETIZATION IN INDIA
On 8th Nov 2016, the government decided to demonetize the 500 and 1000 rupee notes, the two
biggest denominations in its currency system which accounted for 86% of the circulating cash in a
country where some 78% of all customer transactions are in cash and only 60% of the ATMs were
functional
EXAMPLES FROM INDIAN HISTORY
RETAIL SECTOR
DEMONETIZATION AND RETAIL
150
Oct-16 Nov-16 116.7
90.6
Consumer prices rose by an annual 100 74
1 3.41 per cent in Nov 2016, their
50
slowest pace since November 2014
1.8 2.8
0
Microwave Refrigerator Air Conditioner Washing
There has been a drop of 30% -50 -34 Machines
2 customers footfall -53
-41.2
-100
Demonetization led to the declination of sales of consumer
Spend per customer per visit drop by durables by around 40%, causing cut in production of units
3 40% Stock price of retail stores before and after demonetization
300
250
Govt reports from 47 Its been more than 6 April saw total digital
cities have reported a months but ATMs across transactions of Rs
combined 268% year- the city still continue to 109.58 trillion, down
on-year increase in be dry with only 30 per 26.78% from Rs 149.58
tax collection cent of them having trillion in March
cash
CBDT claims to have The move helped in In Jan 2017, govt report
detected an the establishment of suggested a 60%
undisclosed income Modis vision of decrease in terror
of over Rs 93.34bn digital India but the attacks in Kashmir but
through more than %age is very small the trend reversed in a
2362 searches matter of few weeks
REFERENCES
1. http://www.freepressjournal.in/featured-blog/indias-history-with-
demonetisation-from-1946-to-2016/988212
2. https://mostlyeconomics.wordpress.com/2016/11/11/digging-
through-india-demonetization-history-12-jan-1946-saturday-and-
16-jan-1978-monday/
3. https://economics.rabobank.com/publications/2017/march/india-
where-is-the-negative-impact-of-demonetization/
4. http://www.livemint.com/Politics/Bk68qA95Y0sdktjZprgUYL/100-
days-after-demonetisation-have-digital-payments-increas.html
5. http://retail.economictimes.indiatimes.com/re-tales/demonetization-
s-impact-on-indian-retail/1949
6. https://retail.franchiseindia.com/article/multi-
channel/eretail/Demonetization-s-Impact-on-Indian-Retail.a5528/