A RISK OF DEMONITISATION AND ITS IMPACT ON VARIOUS SECTORS

Abstract

It has been argued in favor of demonetization that the cash put out is "black money" and therefore it should be well-positioned to set up the defective promotion structure of the economy. The fact is that if there is no evidence available, it is a foolish thing that this is the only possibility. Therefore, it is important to think of the short-run and medium-term consequences that such a shock will bring to the economy. Further, the effect of such a result will depend on how much the government recommends. This paper explains the effect of such a result on debt, expenditure, activity and availability of government financing.