An Empirical Study on Impact of Demonetization on Selected sectors through various Indices
- Vidhi Shah, Assistant Professor, Faculty of Management, GLS University, Ahmedabad, Gujarat
Abstract:
At the stroke of 8 pm, on 8th November 2016, PM Narendra Modi made a historical move by
announcing the scrapping out of two highest denomination currency notes in India i.e. Rs. 500
and Rs. 1000 as legal tender by central government. This financial surgical by the PM, also
called demonetization, became one of the most sensational and bold move by any government to
curb the menace of black money, counterfeit notes, parallel economy and terror funding. This
will also have a major impact on the common man in terms of leading towards a cashless
economy, which will enhance transparency and accountability in the economy. It would be too
early and inappropriate to comment on the exact impact this move will have on our economy in a
long run, but then we can try finding out the impact on various sectors. The paper analyses the
impact of demonetization on Indian stock market as represented by Sensex index of Bombay
Stock Exchange. Also, the paper further analyses the impact of the decision on various sectors of
Indian Economy represented by various sectorial indices of service and manufacturing industry
of Bombay Stock Exchange through paired t test considering a time frame of a month pre and
post demonetization decision.
Keywords:
Demonetisation, Indices