Question

Explain briefly the adverse impacts of demonetisation on the Indian economy.

Answer 1

Since the Indian economy is a cash-dependent economy, where half of the population uses cash for transactions, demonetisation has heavily affected trade, business and consumption. This resulted in job losses, a decline in farm incomes and social disruption. Most of the daily wage workers were left with no jobs and their daily income had stopped because employers were unable to pay their daily wage.