Answer to Question #247691 in Microeconomics for Susharsan

Question

Demonetization has brought many changes the Indian economy , comment this statement

Answer 1

The economic and industrial activities in India were disrupted after demonetization. There was a lower domestic GDP growth after demonetization. It has lowered the economic growth rate by at least 2% in the first quarter. Small businesses in the country were worst hit by the move as most of them relied on cash payments. There were increased cases of unemployment as most people lost their jobs temporarily especially the Below Poverty Line families. However, demonetization has helped the Indian government in tracking black money and the money that is not accounted for. It also promoted digital transactions in the country and also improved the tax payers base which were major achievements to the government