Demonetisation –Worst Effected the Small Traders

Abstract: – Demonetization is the process in which a particular currency or valuable mineral is degraded as a legal tender. This happens when a certain currency is no longer in regular use within the country of origin, or when a newer currency comes into circulation. The latest demonetisation, in India was the suddenly announcement by Prime Minister of India on 8th November at 8.30 p.m. that ` 500 and `1,000 notes would not be legal tender from midnight of 8th November 2016. The announcement was made much after banking hours thus giving no body a chance for any foul play.

The Reserve Bank of India (RBI) data suggests that the proportion of `500 and `1000 notes were 86.4% of total value of notes in circulation on March 31, 2016, amounting to `14 trillion. A lot of this money was also considered to be fake money pumped into the economy to fund terrorist activities. At the stroke of midnight of 8th November 2016, India lost 86.4% of its monetary base. In this single move, the Government has attempted to tackle all the three issues affecting the economy i.e. a parallel economy, counterfeit currency in circulation and terror financing.

The Governments move to introduce the ` 2000/- in new currency to ease the money shortfall has not helped because small buyer have been left with a big currency that nobody wanted to exchange. Those who had cash are using it prudently and only if is absolutely necessary because they did not want to go through the ordeal of standing in long queues at banks for cash withdrawals. This has lead to a lot of hardship to small traders who do not have large holding capacities and need to sell per day to meet their family needs.

The study aims to understand the impacts of demonetisation on the small and marginal traders and the change that has arisen in their daily business and innovative ideas that they have undertaken to overcome this problem.

Keywords: Demonetisation, small and marginal traders, survival
innovation

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