This research was done out of Gwalior's retailers. We were to find the effect of Demonitization on Retail Market.

1. IMPACTOFDEMONITIZATIONON
RETAILSECTOR
GroupMembers:
 GovindKumarBhadauria–BCMH1CF16009
 NitinBansal–BCMH1CF16015
 PriyomMajumder–BCMH1CF16016
 SugamSingh–BCMH1CF16026
SubmittedTo:
Mrs.VippaDhingra
ITMUniversity,Gwalior

2. IMPACTOFDEMONITIZATIONONRETAILSECTOR
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I. INTRODUCTION
DemonetizationMeansBantheselectedcurrencynote.Demonetizationistheactof
stripingofacurrencynoteinthecountry.Thisdecisionmakesacountrypopulationin
bigtrouble.Demonetizationwasdoneonlytoextracttheblackmoneyfromacorrupted
people.Mostinterestingthingaboutcurrencydemonetizationisthatpublicareengage
inmaketheirblackmoneytowhitebyfollowingways:
1)Depositingmoneyinpoorfamilyimages.
2)Peopletoldtotheiremployeethatyoustandinqueuetoexchangethemoneyandin
returnIwillgiveyouacommission.
3)Convertblackmoneyinwhitebypurchasinggold.
4)Payingafewmonthsinadvance.
5)PublicalsoearnfromdemonetizationsayingthatIwillexchangethemoneybehalf
ofyouandyouwillgivesomepercentageonthis.
AfterdemonetizationPM givethetimetopublictill30
th
december2016.Andwho
lefttosubmittheoldcurrencynotetheyhaveatimetodepositmoneyinRBIandfillthe
declarationform.Bychangingthecurrencynotespeoplefacemanyproblem and
economyalsomisbalanceduringthesedaylesstransactionwillbetheredueto
shortageofmoneytothepeople.
Retailerisapersonthatsellsgoodsandservicesdirectlytoconsumerwiththe
motiveofearningamaximum profit.Retailerisapersonwhoprovidesgoodsand
servicesthatyouneedindailyusesorotherneeditemsthesestorescanbeavailable
onlineorphysically.Someofthebasicimpactofdemonetizationonretailersisas
follows:
1.Indianretailergeneratesmoneyfrom cashtransactionbutafterdemonetization
theyarenotgeneratingcashthat’swhytheremightbereductioninsaleofovernext
1-2quarter.
2.Smallretailersarenothavingknowledgeofusingadigitalpayment.
3.Largeretailersandmallarealsofacingadecreaseinsaleduetodemonetization.
4.Duetodemonetizationcredittransactionisless thancashtransaction.
5.Duetodemonetizationthetaxesoftheretailerincreasesduetodigitalpayment.

3. IMPACTOFDEMONITIZATIONONRETAILSECTOR
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II. OBJECTIVESOFPAPER
 Tostudytheexperienceofimpactofdemonetizationinvariouscountriesinpast
years.
 ToanalyzethecurrenttheimmediateimpactofdemonetizationonRetailMarket.
 Toworkouttheprobableconsequencesofdemonetization.
III. RESEARCHMETHODOLOGY
Thepaperisbasedonprimarydata.Thedataiscollectedfromtheoriginalretailers.
Graphandpercentilemethodhasbeenusedtoanalyzethedata.
IV. REVEWOFLITERATURE
Invalidationof500and1000notesthreatenstopushAsia’sthirdlargest
economyintoliquiditycrisis.
Demonetizationimpactedseverelyasitledtocashcrunchwhichwillultimately
resultinGDPgrowthcrashingto0.5% inthesecondhalfoffinancialyear2016-
17meaningherebyitwoulddecelerate0.5%downfrom6.4%intheprevioussix
months.GrowthfromOctobertoDecemberquarteritwillshownegativegrowth
(asperreportedbyAmbitCapital,Mumbaibasedequityresearchfirm).
DisruptioninSupplychainManagement:
“Theentiresupplychainhasbeenbroken,”saidbySomani,whoemploy150
peopleacrossIndiafrom hisbaseoutsideMumbai,ashistruckareabandoned
withnomoneyforfuel,workerswon’tstackgoodsforfreeofcharge,and
distributorscan’tpayup.
Impactonsupplychainofgoodsandservicesisdismantledwhichwillfurther
impacttheproduction.Somanireportedthattheyarecuttingtheirproduction
butifitgoesforoneortwomonthsthentheywillbadlysuffer.
Businessmenaredeprivedoffundsovernighttocarrytrades,astheyneither
havesourcegoodsnortheycanpaythetransportofgoodstomarket.Retailers
cannotselltheircommoditiessincecustomersarenothavingcashandcan
provideoncreditonlyuptocertainextent.
GuruandShrutiKahanijow (2010),Researcheranalyzedtheblackmoney
income?NeedforamendmentinDTAA&ITEAandanalyzedthatblackmoneyis
spreadeverywhereinIndiauptoalargeextentwhichcontinuouslystashed
towardsabroadinaverylargeamount.Theresearcheralsoidentifiedhowblack
moneyhadcausedmenacesinoureconomyandinwhatwaysitisused.
SukantaSarkar(2010),conductedastudyontheparalleleconomyinIndia:
Causes,impactsandgovernmentinitiativesinwhichtheresearcherfocusedon
TheexistenceofcausesandimpactsofblackmoneyinIndia.Accordingtothe
study,themainreasonbehindthegenerationofblackmoneyistheIndian

4. IMPACTOFDEMONITIZATIONONRETAILSECTOR
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PoliticalSystem thatisthe Indian governmentjustfocused on making
committeesratherthantoimplementit.Thestudyconcludesthatlawsshouldbe
implementedproperlytocontrolblackmoneyinoureconomy.
GeetaRani,(2016),Thestudyshowsthatinitiallythedemonetizationeffectson
marketwerepainfulbutthisinvestigatetheshopkeepersandconsumersto
adoptcashlessmeanssuchaspaytm,debitcarduse,internetbankingtobuy
goods.Byadoptingthecashlessmeanseconomywillbesoundincomingtime
andIndianEconomywillgetbenefitsofearlyandhasslefreetransactions.
TaxResearchTeam (2016),themainobjectiveistoanalyzetheimpactof
demonetizationonIndianeconomyanditshowstheimpactofsuchamoveon
theavailabilityofcredit,spendinglevelofactivityandgovernmentfinances.
CareRating(ProfessionalRiskopinion–2016),Suggestedthattheinitial
disruptionsinthesystem,eventuallychangewellassimilatedandwillprove
positivefortheeconomyinthelongrun.Blackmoneyhoarderswilldefinitely
loseoutandeventuallyboostingtheformaleconomyinthelongrun.Shortterm
fallinrealestatepricesmightbenefitmiddleclasscitizens.Thismovebythe
GovernmentalongwiththeimplementationoftheGSTwilleventuallymakethe
systemmoreaccountableandefficient.
Veerakumar.,K,(2017),thispaperanalyzeddemonetizationistakenforseveral
measuressuchastaxevasion,counterfeitcurrencyandfundingofillegal
activities.Somepeoplearedepositingcurrencynotesinexcessofspecifiedlimits
directlyintobankaccountsandhaveshowedtheunaccountedincomesubjectto
highertaxandotherpenalties.Alternativepaymentmethodssuchase-wallets,
onlinetransactionsusinge-banking,debitandcreditcardusagehavebeen
increasedandthiswillshiftanefficientcashlessinfrastructure.
CashCrunched:
Peoplecomprisingfrom unorganizedsectortobigconsumergoodshaveseen
theirincometumbledbyapproximately80percentinthefirstweekofswap
alone.
Populationrelyingoninformal,cashbasedareseverelyhit.Aninterviewshowed
thatGreengrocerofNew Delhiborrowsmoneytorunhisshopandhegave
vegetablesoncreditforfirsttwodaysbutnowheisforcedtoshutdownhis
shopashedoesn’thaveenoughcash,healsotoldthatifthisconditionpersists
formorethanatwoweeksthenhisfamilymighthavetogofoodless.
Forbiggerfirmsithasbeenmoredifficulttopaytheiremployees.
Forconstructionsectorscashisthebasicforminwhichpaymentsarepaid.
ChandubhaiKothia,headofGujaratbasedShreeGaneshChemicalscomplained
thatlimitof24000cashwithdrawalperweekisnotsufficientaspaymentsof
wagestoworkersandtransportsaretobedoneincash.
V. THEEXPERIENCESFROMSOMECOUNTRIES
Russia

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Onitslastlegs,thecountryunderMikhailGorbachevinJanuary1991withdrew
large-rublebillsfromcirculationinamovetotakeontheblackeconomy(“Impactof
DemonetizationonIndianEconomy”byDr.PratapSinghandVirenderSingh).The
reform failedtohaltinflation,andinsteadservedmainlytoaccelerateaslidein
publicconfidencein thegovernment.Asinfightingcombiningwitheconomic
collapse,GorbachevfacedacoupattemptthatAugustwhichdestroyedhisauthority
andledtotheSovietbreak-upthefollowingyear.Learninglessons,Russia’s1998
redenominationoftheruble,whenitremovedthreezeroes,wentaltogethermore
smoothly(“ImpactofDemonetizationonIndianEconomy”byDr.PratapSinghand
VirenderSingh).
NorthKorea
In2010,theregimeofthen-dictatorKimJong-IImountedareformthatknockedoff
twozerosfromthefacevalueoftheoldcurrencynotesinanefforttotightencontrol
oftheeconomyandcloseblackmarkets.Combinedwithapoorharvest,the
measureleftthecountrywithseverefoodshortages,accordingtoreportsatthe
time(“ImpactofDemonetizationonIndianEconomy”byDr.PratapSinghand
VirenderSingh).Surgingriceinpricesstokedunrestthatpromptedanunusual
apologyfromKim,and–reportssuggested–theexecutionoftherulingparty’shead
offinance.
Zaire
DictatorMobutuSeseSekofacedincreasingeconomicdisruptionsintheearly1990s,
whenhisadministrationmountedsuccessivebanknotereforms.Aplantowithdraw
obsolescentcurrencyfrom thesystem in1993saw asurgeininflationanda
collapseintheexchangerateagainstthedollar.Afteracivilwar,Mobutuwasousted
in1997(“ImpactofDemonetizationonIndianEconomy”byDr.PratapSinghand
VirenderSingh).
Myanmar
ThiscountryDemonetizedin1982togetridofits50cedinotetocrackdownontax
evasion,addresscorruption and mop up excessliquidity.Thismoveeroded
confidenceinthebankingsystemaspeopleturnedtoforeigncurrencyorphysical
assetsinstead;theblackmarketwasasaresultflourished(“3rd
International
Conference on RecentInnovationsin Science,Technology,Managementand
Environment.”byDr.PratapSinghandVirenderSingh).
Nigeria
In1984,themilitarygovernmentledbyMuhammaduBuhariinstitutedananti-

6. IMPACTOFDEMONITIZATIONONRETAILSECTOR
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corruptioncrackdownthatinvolvedissuingnewbanknoteswithadifferentcolor,
forcingthereplacementofoldoneswithinalimitedperiod.Themovewasoneofa
seriesthatfailedtofixadebt-burdenedandinflation-riddeneconomy.Buhari,who
isnow inpower,again,waseventuallyoustedinacoupthefollowingyear(“3rd
International Conference on Recent Innovations in Science, Technology,
ManagementandEnvironment.”byDr.PratapSinghandVirenderSingh).
Pakistan
ThetrendwasfollowedalsobyPakistanonandfrom 1
st
December2016.The
federalgovernmentdecidedthatbanknotesofthedenominationofPakistanirupees
10,50,100and1,000willceasetobelegaltenderfrom December1,2016.There
wasahighdemonetizationon5,000currencynotesina“phasedmanner”towipe
uptheflow ofblackmoney(www.indianexpress.com).However,anotification
issuedbytheStateBankofPakistanonJune11,2015statedthattheoldnotesare
exchangeableatbankstillNovember20,2016.Butfieldofficersofthecentralbank
willcontinue to acceptthe notesofolderdesign tillDecember31,2021
(www.news18.com).
Zimbabwe
Oneoftheprimaryreasonsforinitiatingdemonetization in Zimbabwewas
“Hyperinflation”.Peopleeventobuyaloafofbreadhadtopaytheamountina
trillion!Whenthehighestdenominationnote-100TrillionDollarnotewasnot
issued,ATM’swererunningoutofcashaspeoplewerewithdrawingcashin
billions/trillionsandthechequeissuedhadtobedoubletheamountasbythetime
cheque used to reach clearing the inflation rose.Allthis contributed to
HYPERINFLATIONandfinally,thegovernmentdecidedtodemonetizeZimbabwe
Dollar,whereanybankthatwouldhaveheldbetweenZerosto175Quadrillion
ZimbabwedollarsgotaflatamountofUS$5.DuetosuchhighvalueofZimbabwe
Dollarpeople use to trade in US dollar,the South African rand orEuros
(DemonetizationinIndiaandZimbabwe,www.teknospire.com).
VI. IMPACTOFDEMONITIZATIONONRETAILOUTLETS
Duringthisdemonetizationperiodretailersfacedmanyproblem relatedto
generatingofincomeandsaleofgoods.Wefoundoutmanythingsrelatedtothis
saleofgoodsintheretailmarket.Somepointsare:
 80% shopkeeperstoldthatduringthestartingdaysofdemonetization
therewas20% increaseintheirsaleduetoacceptingtheoldcurrency
butinthelaterhalftherewas50%decreaseinsaleduetonotavailability

7. IMPACTOFDEMONITIZATIONONRETAILSECTOR
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ofpropercash.
 Thewholesalersdeniedextendingthecreditspanoftime.
 ShopkeepersstartedPayTmandchequefacilitiesforconsumers.
 70% shopkeepershadtoextendthecreditfacilitiesforconsumersand
spanofcredittime.
 BrandslikeHUL,P&G,Parle,Cokedemandaffectedonly20% dueto
brandloyalty.Butthatdidn’tputmucheffectinthemarket.
 Therehasbeenadropof30%customer’sfootfall.
 Spendpercustomerpervisitdropby40%.
 Itemsboughtpercustomer20%decreased.
Effectsofdemonetizationonfollowingcategories:
 Saltysnackssaledecreasedby10%.
 Chocolatessaledecreasedby50%.
 Biscuitssaledecreasedby20%.
 Sparklingdrinkssalewasdecreasedby50%.
 Fruitdrinkssaledecreasedby20%.
 Cigarettessaledecreasedby10%.
 Toiletsoapssaledecreasedby10%.
 Hairdyessaledecreasedby10%.
 MobilephonesandPCsalesdecreasedby70%
 Goldsaleincreasedby70%.
 Durablegoodssaledecreasedby60%.
VII.CONCLUSION
Fromthestudyitcouldbesaidthatinitiallythemarketwasaffecteddueto
demonetizationbutlateronwardsitcametonormal.BytheendofDecemberall
theretailersgottoknowabouttheuseofdigitalpaymentsandtheyadoptedthe
useofdigitalpayment.TheretailerscameupwiththeuseofPayTmandmobile
banking,debitcardandinternetbanking.Byadoptingthecashlessmeans
economywillbesoundincomingtimeandIndianEconomywillgetbenefitsof
earlyandhasslefreetransactions.Thisstepwillimprovetheeconomyofthe
countryinthefutureyearsbuttheuseofdigitalpayment,sincenew,willaffect
thetransactionsbutwillultimatelyimprovethesaleandrevenuegeneration
sinceitisthemosteasiestwaytoperform dailytransactionformodern
generation.
VIII.REFERENCES
i. Dr.Pratap Singh and VirenderSingh.December2016.Impactof
DemonetizationonIndianEconomy.InternationalJournalofScience
Technology and Management.
https://www.ijstm.com/images/short_pdf/1482138511_210ijstm.pdf
ii. Dr.Pratap Singh and VirenderSingh.December2016.Impactof

8. IMPACTOFDEMONITIZATIONONRETAILSECTOR
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DemonetizationonIndianEconomy.3rd
InternationalConferenceon
Recent Innovations in Science, Technology, Management and
Environment. http://data.conferenceworld.in/IFUNA18DEC16/P290-
300.pdf
iii. http://indianexpress.com/article/world/demonetisation-in-pakistan-
senate-passes-resolution-to-withdraw-rs-5000-note-4436576/
iv. http://www.news18.com/news/india/pakistan-also-in-demonetisation-
mode-but-has-time-till-december-31-2021-1315771.html
v. http://www.teknospire.com/static/Blog/DemonetizationInIndiaAndZim
babwe.html
http://www.allresearchjournal.com/archives/2016/vol2issue12/PartF/
2-12-71-172.pdf
vi. ArpitGuruandShrutiKahanijow,Theblackmoneyincome?Needfor
amendmentinDTAA&ITEA.InternationalJournalofAppliedResearch,
2010,4(10)
vii. SukantaSarkar,TheParallelEconomyin India:Causes,impacts&
governmentinitiatives,EconomicJournalofDevelopmentIssues,2010,
11(12),(1-2)pp.124-134.
viii. GeetaRani,EffectsofDemonetizationonretailoutlets,International
JournalofAppliedResearch,2016,2(12)pp.400-401.
ix. TaxResearchTeam,Demonetization:ImpactontheEconomy,National
InstituteofPublicFinanceandPolicy,NewDelhi.No.182,Nov-2016.
x. Care Rating ProfessionalRisk opinion,Economic consequences of
demonetizationof500and1000RupeeNotes,EconomicsPolicyView,
Nov09,2016.
xi. Veerakumar.,k,A Study on People Impact on Demonetization,
International Journal of Interdisciplinary Research in Arts and
Humanities2017,2(1),pp.9-12.