Demonetization and Its Impact on Employment in India

TL;DR

This paper examines the immediate effects of India's demonetization on employment, highlighting economic disruptions and contrasting political perspectives on its efficacy in addressing black money and related issues.

Contribution

It provides an analysis of the socioeconomic impact of demonetization on employment in India, emphasizing the political divide and economic consequences.

Findings

Significant disruption in employment due to demonetization

Political parties hold contrasting views on its effectiveness

Economic activities were notably affected in the short term

Abstract

On November 08, the sudden announcement to demonetization the high denomination currency notes sent tremors all across the country. Given the timing, and socioeconomic and political repercussions of the decision, many termed it a financial emergency. Given high proportion of these notes in circulation, over 86 percent, it led to most economic activities, particularly employment, affected in a big way. Political parties, however, seemed divided on the issue, i.e. those in favor of the decision feel it will help to curb the galloping size of black money, fake currency, cross boarder terrorism, etc. In sharp contrast, the others believe it is a purely misleading, decision, based on no or poor understanding of black economy, and hence is only politically motivated in wake of the assembly elections due in a couple of states.