IMPACT OF DEMONETIZATION ON STOCK MARKET

IMPACT OF DEMONETIZATION ON
STOCK MARKET
BY
RUPAL ROUT
ROLL NO
2013MBA006
A PROJECT REPORT
INTERNAL GUIDE EXTERNAL GUIDE
MRs. APEKSHA SAHAY MR. BIPIN BIHARI DUTTA
(FACULTY IN FINANCE) ASSISTANT MANAGER
(BHUBANESWAR STOCK EXCHANGE ltd.)
SUBMITTED TO THE
DEPARTMENT OF I-MBA
In Partial fulfillment for the award of the degree of
INTEGRATED MASTER OF BUSINESS ADMINSTRATION
B.J.B AUTONOMOUS COLLEGE
BHUBANESWAR

2
IMPCAT OFDEMONETIZATION ON STOCKMARKET
ACKNOWLDEGEMENT
I want to thank and Odisha capital market & enterprises ltd. (previously known as Bhubanseswar
Stock Exchange) ,Bhubaneswar for providing me the opportunity to work with this prestigious
company in india.
I also thank to MRs. Apeksha Sahay with my deep sense of gratitude.
And finally thankful to all faculty members for rendering their valuable guidance to prepare the same
and all my friends and my family specially my father for their encouragement and support extended
to me during the course of my project.
At the end i would not forget to thank MR. Bipin Bihari Dutta Sir,my guide and other members of
Odisha capital market and enterprises ltd.,who treated me with so much respect and helped me in the
best of their capacity.
DATE- RUPAL ROUT
PLACE-BHUBANESWAR 2013MBA006

3
DECLARATION
I Rupal Rout, do here by, declare that this project report entitled “A SUMMER INTERNSHIP
PROJECT ON IMPACT OF DEMONETIZATION ON STOCK MARKET” submitted for the
partial fulfilment of MBA to BJB autonomous college, Bhubaneswar, affiliated to Utkal University
is at my own and original work during 9th semester of 5th year, and has been carried out under the
guidance of MRS. Apeksha Sahay, faculty of finance, IMBA dept, Bhubanewar.I also declare that
the facts and figures presented in this project are true to my knowledge and information.
NAME-RUPAL ROUT
ROLL NO-2013MBA006

4
CERTIFICATE
It is certified that the project report titled “IMPACT OF DEMONETIZATION ON STOCK
MARKET” is the bonafide work of RUPAL ROUT bearing roll no-2013MBA006 who carried out
the work under my supervision .Certified further that to the best of my knowledge the work reported
her in does not form any part of any project work or dissertation on basis of which a degree or award
is conferred on an earlier occasion on this or any other candidate.
Signature of student Signature of internal guide
Name- Mrs. Apeksha sahay
Faculty of Finance & Account

5
EXECUTIVE SUMMARY
Demonetization is a generations’ memorable experience and is going to be one of the economic
events of our time. Its impact is felt by every Indian citizen. Demonetization affects the economy
through the liquidity side. Demonetization is progressive shift to a cashless economy with a greater
focus on electronic transactions is being envisaged. Rising use of credits cards/debit cards ,virtual
cards, net banking, crypto currency and other online payment mechanism will be another positive
effect of demonetization as these would not only lower transaction costs but some of these could
help earn some income and somehow it may help Odisha in competing with other competitors in
capitalization market. The Indian Economy which was billed as the “fastest growing major
economy” in the world and the “only bright spot” among Emerging Markets seems to have slowed
down even before the latest “shock therapy” of “demonetization”. Indeed, the recently released
growth figures from the CSO or the Central Statistical Office considered to be the official
department that releases projected, and actual growth figures (apart from the RBI or the Reserve
Bank of India and the Finance Ministry) hints at a slowdown in the Indian economy even during the
quarter before demonetization happened.
While this is indeed cause for concern with projected growth figures revised downwards from 7.6 %
to 7.1% for the financial year ending March 2017, what is cause for greater worry and even alarm is
the view among some economists including the former Prime Minister Dr. Manmohan Singh (who is
a reputed economist in his own right) that the current and ongoing attempt to flush out black money
would shave a good 2% of the GDP or the Gross Domestic Product.Somehow India has seen a least
impact of demonetization on stock market.

6
TABLE OF CONTENTS
EXECUTIVE SUMMARY
PAGE NO
CHAPTER 1:INTRODUCTION 10-27
CHAPTER 2:COMPANY PROFILE 28-30
CHAPTER 3: LITERATURE REVIEW 31-32
CHAPTER 4: RESEARCH METHODOLOGY 33-35
CHAPTER 5;DATA ANALYSIS , INTERPRETATION 36-64
AND OBSERVATION
CHAPTER 5: FINDINGS & SUGGESTION 65-71
CHAPTER 6: CONCLUSION & LIMITATION 72-74
CHAPTER 7: ANNEXURE & BIBLIOGRAPHY 75-80

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LIST OF TABLES PAGE NO.
TABLE-1-GENDER GROUP OF INVESTORS 37
TABLE-2-AGE GROUP OF INVESTORS 38
TABLE-3-OCCUPATION GROUP OF INVESTORS 39
TABLE-4-INCOME GROUP OF INVESTORS 40
TABLE-5- SAVINGS BY OF INVESTORS 41
TABLE-6-UTILIZATION THE SAVINGS BY INVESTORS 42
TABLE-7-OPTING FOR NOT UTILIZATION OF SAVING BY INVESTORS 44
TABLE-8- INVESTMENT IN STOCK MARKET 45
TABLE-9- OPTING FOR INVESTING IN STOCK MARKET 46
TABLE-10- OPTING FOR NOT INVESTING IN STOCK MARKET 47
TABLE-11-DUARTION OF INVESTMENT 48
TABLE-12-INCOME IN INVESTMENT 49
TABLE-13-SECTOR WISE INVESTMENT 51
TABLE-14-INCOME IN INVESTMENT POST DEMONETIZATION 52
TABLE-15-INCREASE IN INVESTMENT POST DEMONETIZATION 53
TABLE-16-DECREASE IN INVESTMENT POST DEMONETIZATION 55
TABLE-17-INVESTMENT AS PER BROKER’S ADVICES 56
TABLE-18-INCREASE IN INVESTMENT AS PER BROKER’ ADVICES 57
TABLE-19-DECREASE IN INVESTMENT AS PER BROKER’S ADVICES 59
TABLE-20-LESS RISKIER SECTORS 61
TABLE-21-IMPACT OF DEMONETIZATION 63
TABLE-22-GROWTH POST DEMONETIZATION 64
TABLE-23-MARKET CRASHING POST DEMONETIZATION. 64

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LIST OF CHARTS PAGE NO
CHART-1-GENDER GROUP OF INVESTORS 37
CHART--2-AGE GROUP OF INVESTORS 38
CHART-3-OCCUPATION GROUP OF INVESTORS 39
CHART-4-INCOME GROUP OF INVESTORS 40
CHART-5-OPTING FOR SAVING GROUP OF INVESTORS 41
CHART -6-UTILIZATION THE SAVINGS GROUP OF INVESTORS 43
CHART -7-OPTING FOR NOT UTILIZATION OF SAVING BY INVESTORS 44
CHART -8- INVESTMENT IN STOCK MARKET 45
CHART -9-OPTING FOR INVESTING IN STOCK MARKET 46
-CHART 10- OPTING FOR NOT INVESTING IN STOCK MARKET 47
CHART 11-DUARTION OF INVESTMENT 49
CHART -12-INCOMEIN INVESTMENT 50
CHART -13-SECTOR WISE INVESTMENT 51
CHART -14-INCOMEIN INVESTMENT POST DEMONETIZATION 53
CHART-15-INCREASE IN INVESTMENT POST DEMONETIZATION 54
CHART 16--DECREASE IN INVESTMENT POST DEMONETIZATION 55
CHART -17-INVESTMENT AS PER BROKER’S ADVICES 56
CHART-18-INCREASE IN INVESTMENT AS PER BROKER’ ADVICES 57
CHART-19-DECREASE IN INVESTMENT AS PER BROKER’S ADVICES 60
CHART-20-LESS RISKIER SECTORS 62
CHART-21-IMPACT OF DEMONETIZATION 63
CHART-22-GROWTH POST DEMONETIZATION 64
CHART- 23-MARKET CRASHING POST DEMONETIZATION 64.

9
CHAPEPTER – 1
INTRODUCTION

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Objective of the study-
To understand the meaning of demonetization.
To analyze whether it has any affect on stock market.
To analyze the impact of demonetization on stock market.
To analyze the impact of demonetization on various sectors of stock market.
To analyze whether it has any effect on investment of people post demonetization.
To analyze the portion of income invested in stock market by investors pre-demonetization .
To analyze the increase and decrease in investment post demonetization.
To analyze the investment according to various sectors as per broker advices post demonetization.
To analyze which sectors were on gainer side and which sectors were on looser side post
demonetization.
To analyze the parallel impact on stock market and other sectors.
To analyze the investment options in less-riskier sectors.
To analyze whether it will help in growth of stock market or not.

11
CHAPTER-1
INTRODUCTION

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INTRODUCTION
Demonetization was the boldest step taken by GOVT. Of India and Reserve bank of India on 8th
November 2016 which symbolizes about the five hundred and one thousand rupee note will be no
longer legal tender. Demonetization defines as the act of stripping of old rs.500 & rs.1000 notes as an
official mode of payment. On a layman concept ,it means that Reserve Bank of India has withdrawn
the old currencies of rs.500 & rs.1000 and it won’t be considered as legal ones .On 28th October
2016,the total currency in circulation in India was rs.17.77 lakh crore ( US$260 billion ). In terms
of value ,the annual report of Reserve Bank of India of 31st March 2016 stated that total bank notes
in circulation valued to 16.42 lakh crore (US$ 240) of which nearly 86% (i.e. rs. 14.18 lakh crore
(US$210 billion) was rs.500 and rs.1000 rupee notes. In terms of volume, report stated that 24%
(i.e.2,201 crore) of total 9,026.6 crore banknotes were in circulation. In an important move, the
Government of India while withdrawing the high denomination valued notes on 8th November 2016
midnight, in the other hand, introducing rs.2000 valued note and rs.500 valued new note in the
circulation from 10th November 2016.Notes of one hundred, fifty ,twenty, ten, five, two and one
rupee will be legal tender and will remain unaffected by this action. This measure has been taken by
the PM in an attempt to address to resolve against corruption, black money and counterfeit notes.
This move is expected to cleanse the formal economic system and discard black and fake currencies
from the same. The reasons of it are as under:
 To tackle high amount of undeclared black money in economy; To lower cash circulation in
the country which directly leads to deposition of cash in high amount;To eliminate fake
currencies which is mostly printed in Pakistan, Bangladesh, Nepal, etc; To eliminate dodgy
funds which is used to fund terror groups Maoist groups to increase in terrorism acts.; This
move is estimated to scoop out more than rs.5lakh crore black money from the economy
 Similar measures have been taken in the past .In January 1946, currency notes of rs1000 and
rs.10,000 rupees notes were withdrawn and notes of 1000, 5000,10,000 rupees notes were
introduced in 1954.
 In 1978,Janata Government thought that high denomination notes were facilitating the illegal
transfer of money for financing transactions which are harmful for national economy. So the
ordinance was promulgated in 1978 to withdraw notes of with denomination of rs1000, rs
5000 and rs 10,000.
 While this is indeed cause for concern with projected growth figures revised downwards from
7.6 % to 7.1% for the financial year ending March 2017, what is cause for greater worry and
even alarm is the view among some economists including the former Prime Minister Dr.
Manmohan Singh (who is a reputed economist in his own right) that the current and ongoing
attempt to flush out black money would shave a good 2% of the GDP or the Gross Domestic
Product.

13
 Indeed, some think tanks and research institutes such as Ambit Research have given even
more dire assessments with their projections of growth figures tending to be in the less than
3% range. Of course, the consensus view among many economists is that while there would
be indeed a noticeable slowdown in the economy for a “quarter or two”, most of them seem
to agree that growth would indeed bounce back and the Indian economy would regain its
momentum as well as turnaround with a renewed sense of vigour due to higher tax revenues.
 Having said that, one must keep in mind the fact that as per the recent estimates by some
economists, nearly 90% of the total cash in circulation has come back into the banking
systemand hence, the stated purpose of the Demonetization exercise which was to
“extinguish” black money and enable the RBI to lower its liabilities thereby providing the
government with a huge dividend seems to have been belied. Of course, there are some who
now argue that the Indian Banking System is now “flush with cash” and this has enabled the
government to “nudge” the RBI to cut rates as well as to allow banks to pass on the benefit of
ample liquidity to consumers by lowering lending rates.
 However, the flip side of this has been that banks have cut their deposit rates as well which is
natural considering that any cuts to lending rates have to be accompanied by cuts to deposit
rates. This has resulted in a situation where banks with enough deposits seem to be
encouraging spending more than saving and this can indeed create demand in the system
since more money with consumers means more spending thereby leading to an uptick in sales
of goods and services and which has the “multiplier effect” of resulting in more growth.
 On the other hand, with more taxes being collected due to higher deposits in banks that
can be taxable as well as increased compliance due to greater scrutiny and oversight by
the IT (Income Tax) Department, the government too might be tempted to announce lower
rates for taxes and other aspects of what are known as fiscal measures. In this context, it is
worth remembering that fiscal stimulus which is by lowering taxes and providing more
incentives to consumers as well as producers by boosting supply can be complemented and
supplemented by the monetary stimulus which is by boosting demand for goods and services
by lowering lending rates thereby putting more money in the hands of consumers.
 As economic theory states, both fiscal and monetary stimulus can be implemented in isolation
or taken together and hence, the Demonetization or the DeMo as it is being called might
indeed act as a catalyst for growth. Having said that, one must remember that India is
primarily a cash transaction based economy and hence, removing 86% of the money in
circulation is indeed a “brave” move since there are reports that large sections of the informal
economy have come to a grinding halt.
 Moreover, there are also reports of farming sector taking a hit due to lack of cash as well
as sales of automobiles and other capital goods falling eventhough inventories are
building up. Thus, it remains to be seen as to how the growth figures for the next quarter and
the overall financial year turn out to be. Given that mainstream economists tend to debate and
argue both sides with equal passion and vigour, it is the case that as the cliché goes, the

14
“proof of the pudding is in the eating” and hence, the actual growth figures have to be
watched.
 Of course, there are other indicators to keep track of as well in the form of various Indices
such as the PMI or the Purchasing Managers Index which tracks industrial activity as well as
the rates of investment and the credit pickup as well as the Inflation figures. Having said that,
one must also note that given the lack of communication about some of the economic
indicators from the government is indeed worrying given that Demonetization has been billed
as the “Biggest Monetary Experiment” in recent times in the entire world.
 The point here is that any such “disruption” must be both communicated and implemented
well and given some of the concerns expressed in this regard by many commentators, one
must indeed look for “straws in the wind” to make sense of the economic impact of
Demonetization on the country. While this is indeed cause for concern with projected growth
figures revised downwards from 7.6 % to 7.1% for the financial year ending March 2017,
what is cause for greater worry and even alarm is the view among some economists including
the former Prime Minister Dr. Manmohan Singh (who is a reputed economist in his own
right) that the current and ongoing attempt to flush out black money would shave a good 2%
of the GDP or the Gross Domestic Product.
 Indeed, some think tanks and research institutes such as Ambit Research have given even
more dire assessments with their projections of growth figures tending to be in the less than
3% range. Of course, the consensus view among many economists is that while there would
be indeed a noticeable slowdown in the economy for a “quarter or two”, most of them seem
to agree that growth would indeed bounce back and the Indian economy would regain its
momentum as well as turnaround with a renewed sense of vigour due to higher tax revenues.
 Having said that, one must keep in mind the fact that as per the recent estimates by some
economists, nearly 90% of the total cash in circulation has come back into the banking
systemand hence, the stated purpose of the Demonetization exercise which was to
“extinguish” black money and enable the RBI to lower its liabilities thereby providing the
government with a huge dividend seems to have been belied. Of course, there are some who
now argue that the Indian Banking System is now “flush with cash” and this has enabled the
government to “nudge” the RBI to cut rates as well as to allow banks to pass on the benefit of
ample liquidity to consumers by lowering lending rates.
 However, the flip side of this has been that banks have cut their deposit rates as well which is
natural considering that any cuts to lending rates have to be accompanied by cuts to deposit
rates. This has resulted in a situation where banks with enough deposits seem to be
encouraging spending more than saving and this can indeed create demand in the system
since more money with consumers means more spending thereby leading to an uptick in sales
of goods and services and which has the “multiplier effect” of resulting in more growth.

15
 On the other hand, with more taxes being collected due to higher deposits in banks that
can be taxable as well as increased compliance due to greater scrutiny and oversight by
the IT (Income Tax) Department, the government too might be tempted to announce lower
rates for taxes and other aspects of what are known as fiscal measures. In this context, it is
worth remembering that fiscal stimulus which is by lowering taxes and providing more
incentives to consumers as well as producers by boosting supply can be complemented and
supplemented by the monetary stimulus which is by boosting demand for goods and services
by lowering lending rates thereby putting more money in the hands of consumers.
 As economic theory states, both fiscal and monetary stimulus can be implemented in isolation
or taken together and hence, the Demonetization or the DeMo as it is being called might
indeed act as a catalyst for growth. Having said that, one must remember that India is
primarily a cash transaction based economy and hence, removing 86% of the money in
circulation is indeed a “brave” move since there are reports that large sections of the informal
economy have come to a grinding halt.
 Moreover, there are also reports of farming sector taking a hit due to lack of cash as well
as sales of automobiles and other capital goods falling eventhough inventories are
building up. Thus, it remains to be seen as to how the growth figures for the next quarter and
the overall financial year turn out to be. Given that mainstream economists tend to debate and
argue both sides with equal passion and vigour, it is the case that as the cliché goes, the
“proof of the pudding is in the eating” and hence, the actual growth figures have to be
watched.
 Of course, there are other indicators to keep track of as well in the form of various Indices
such as the PMI or the Purchasing Managers Index which tracks industrial activity as well as
the rates of investment and the credit pickup as well as the Inflation figures. Having said that,
one must also note that given the lack of communication about some of the economic
indicators from the government is indeed worrying given that Demonetization has been billed
as the “Biggest Monetary Experiment” in recent times in the entire world.
 The point here is that any such “disruption” must be both communicated and implemented
well and given some of the concerns expressed in this regard by many commentators, one
must indeed look for “straws in the wind” to make sense of the economic impact of
Demonetization on the country.
RECENT DEMONETIZATION SCENES FROM SOME COUNTRIES-
After Demonetization in India, Some other countries tried to withdraw some notes by looking at the
precaution taken by India. The recent incidents are-
 AUSTRALIA-
On December 14th 2016, Australia’ financial services and revenue minister Kelly
O’Dwyer said that the country is reviewing a move to ban its $100 notes, the highest

16
denomination available, as well as potentially restricting cash transactions over a certain
limit. Australia, much like India, wants to clamp down on the shadow economy.
“Removing large denomination notes in Australia would be good for the economy and good
for banks and public,” UBS analysts said in December.
 PAKISTAN-
On December 19th 2016,Pakistan’s senate passed a resolution to phase out it’s rs5,000 notes
in an attempt to curtail black money. In value terms, rs5,000 bills account for 30% of the
currency in circulation in Pakistan.Pakistan government is planning to implement this
strategy in next three years to five years, in contrast to India’s accelerated approach.
 VENZUELA-
On December 11th 2016, Venzuela –whose inflation rate is estimated to touch 475% this
year- announced that it has demonetised its most valuable note, the 100-bolivar bill. It was
estimated 77% of nation cash was in circulation after government gave a 72 hours of time to
replace .It also introduced 20,000 bolivar note.
THE PAST EXPERIENCES FROM SOME COUNTRIES-
With the ban of Rs.500 and Rs.1000 currency and introduction of new notes, India is coping
with demonetisation. The measure isn’t new, however, as several other countries have embraced
it in the past. Some met the purposes, whereas some failed miserably.
Here are eight countries that tried demonetisation before India...
1. Nigeria
During the government of Muhammadu Buhari in 1984, Nigeria introduced new currency and
banned the old notes. However, the debt-ridden and inflation hit country did not take the change
well and the economy collapsed.
2. Ghana-
In 1982, Ghana ditched their 50 cedis note to tackle tax evasion and empty excess liquidity.
This made the people of the country support the black market and they started investing in
physical assets which obviously made the economy weak.
3.Libya-
Its central bank started withdrawing old currency in early 2012 in an attempt to restore liquidity
after it found that the vast majority of funds are being kept outside banks.
4.Iraq-
Even when the Iraqi Swiss dinar ceased to be legal tender in Iraq, it still circulated in the northern
Kurdish regions.Despite lacking government backing, it had a stable market value for more than a
decade
This example is often cited to demonstrate that the value of a currency is not derived purely from its
legal status (but this currency would not be legal tender).

17
5.United States of America-
Paper money was issued by the Confederate States of America during the American Civil War.
 It became worthless by its own terms after the war, since it could only be redeemed a stated
number of years after a peace treaty was signed between the Confederacy and the United States
(which never happened, as the Confederacy was defeated and dissolved).
 Demonetization is currently prohibited in the United States and the Coinage Act of 1965 applies
to all US coins and currency regardless of age.
 The closest historical equivalent in the US, other than Confederate money, was from 1933 to
1974, when the government banned most private ownership of gold bullion, including gold coins
held for non-numismatic
 Now, however, even surviving pre-1933 gold coins are legal tender under the 1964
6.European Union-
 The creation of a single currency for the European Union over 1998-2000 was the largest
demonetisation and currency issue exercise in history.
 Adoption of Euro resulted in demonetization across the various nations of European Monetary
Union.
 Authorities first fixed exchange rates for the varied national currencies into euros. When the euro
was introduced, the old national currencies were demonetized.
7.Zimbabwe-
 Chronic hyperinflation forced the government to print currency notes with a face value of one
hundred trillion dollars.
 This rendered lesser denominations obsolete, which were taken out of circulation quickly.
8.Australia-
 1996, Australia became the first country to have a full series of circulating polymer bank notes
after replacing all paper-based notes, which the government systemically made non-tender for
legal purposes.
 To stop widespread counterfeiting, the Reserve Bank of Australia had released the world’s first
long lasting and counterfeit-resistant polymer (plastic) banknotes.
9. North Korea-

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 In 2010, dictator Kim Jong-2 changed made some changes with currency to lower down the
market of black money and to improve the economy of the country.
 But this decision of Kim Jong saw opposite face of it in economy. Price of necessity goods
increased and this led people to become angry on this decision and resultant Kim Jong
murdered finance minister and asked for apology.
THE PROBABLE CONCEQUENCES OF DEMONETIZATION-
1.Parallel Economy –
The move is expected to curb the parallel economy as the owners of black money will not be in a
position to deposit the money with them in the banks. It is likely to temporarily stall the circulation
of large volume of counterfeit currency and prevent funding for anti-social activities like smuggling,
terrorism, espionage etc.
2.Money Supply-
Money supply is expected to be reduced in the short run until the new notes get widely circulated in
the market. Also, the black money (which is not counterfeit) is not likely to re-enter the system, the
money supply will decrease until the mismatch is corrected by bringing more notes into circulation.
3.Effect On Demand-
Owing to the cash transactions involved in these sectors, the demand in the following areas is
expected to face certain moderation: Consumer goods Real Estate and Property Gold and Luxury
goods Automobiles (to some extent) Effect On Prices Level of prices is expected to be lowered due
to moderation in demand from the consumers.
4.Consumer goods:
Prices of goods are not expected to fall significantly as use of cards and cheques would compensate
for some purchases. Real Estate and Property: The level of prices in this sector is expected to fall
significantly as major part of the transaction is cash based. However in the medium term, the level of
prices in this sector is expected to regain .
Effect On Economic Entities-
The following sections of society could face some short term disruptions to facilitate their
transactions until the new notes are spread widely into circulation. They are: Agriculture & allied
sector, small traders, SME, services sector, households, political parties, professionals like doctor,
carpenter, retail outlets, utility service providers etc. The above sectors are expected to face the most
significant impact of the demonetization process.
1.GDP-

19
With the reduction in the consumption demand, GDP formation in the country could get adversely
impacted. However, the sluggishness is expected to be be less significant as the demand is only got
deferred and will re-enter the system once the situation becomes normal.
2.Banks –
This move will increase the amount of money deposited in Savings and Current Account of
commercial banks. Even most of the Jan Dhan accounts which were lying idle for months have seen
some deposits. This will enhance the liquidity position of the banks and can be utilized by it for
lending purposes. But on the flip side, as households held these money to meet emergency situations,
it is expected that there would be withdrawals from these accounts at the second stage.
3. Online Transactions And Other Modes Of Payment-
There will be a surge in the online transactions and other modes of payment. E-wallets, digital
transaction systems, e-banking, usage of plastic money are expected to see increase in demand.
Eventually this should lead to strengthening of these systems and the concerned infrastructure.
Why Rs 2,000 note has been issued if the objective is to combat black money and corruption by
removing large value notes? It is felt that the small businesses and India Inc still needs to use cash
and in such cases Rs 2,000 denomination notes would come handy.
India’s economic growth may slow to 6.1% in the fiscal third quarter because of the government’s
disruptive move to ban cash, according to the median of five estimates by economists.
Economists surveyed by Mint expect growth in gross domestic product (GDP) in the three months
ended 31 December to be in the range of 5.5% to 6.5%. That compares with the 7.2% growth
recorded in the year-ago quarter.
4.On Tax Compliance
India’s tax-to-GDP ratio is quite low at 16.6% compared to other emerging economies. It is
estimated that since more money, including black money, gets accounted for this will lead to better
tax compliance owing to better targeting of income. The positive impact could be lower tax rates as
the tax base widens and more people start paying taxes. The digital push of the government will also
result in higher indirect tax revenue for the govt. In the form of service tax. Moreover businesses that
under-reported their revenue earlier, will have to make proper disclosure, especially, of revenue
received through digital or cashless means.
5.On Small and Medium-sized Enterprises (smes)
The small and medium-sized enterprise (SME) sector, as we understand, is a big chunk of the
economy, contributing to eight percent of the GDP whilst employing more than 80 million people
year on year.
The labour wages in this sector are largely paid in cash and wages have been adversely affected by
the demonetisation move. Unemployment has also been reported owing to decline in demand of

20
SME goods as the purchasing power of the consumers has contracted in the short term. Other sectors
within the SME space like restaurants and transport operators have also been negatively
impacted since economic activity has declined and also due to the fact that there is high tendency in
this segment to accept payments through cash only.
Wholesale vegetable markets have been witnessing declining demand and prices of tomatoes and
other food items have fallen drastically making it economically unviable for the farmers to produce
these crops. Which takes us to the next point.
6.On Agriculture
This is one sector where all transactions are in cash and, given the values involved, involve the
higher denomination notes. The withdrawal of the old currency notes has put pressure on the mandis;
farmers are having problems in selling their produce as both the parties have to agree on the mode of
payment. Also since there is acute shortage of Rs 500 denomination notes presently, change for the
high denomination Rs 2000 notes is not readily available with the vegetable and fruit vendors. This
is also taking the buyers away from these vendors to big retail markets thus impacting the livelihood
of the unorganised sector.
7.On Employment Generation
Since consumer demand has slowed and consequently industrial production has
declined, employment generation has been adversely impacted by the currency demonetisation drive.
Since the manufacturing sector which accounts for the highest employment of skilled and semi-
skilled labourers, is witnessing slowdown in production; not only less jobs are being created but lay-
offs are also taking place at a higher rate.
As per this report, Industry is staring at temporary job losses due to demonetisation, as production
gets hit, especially in labour-intensive sectors like textiles, garments, leather and jewellery. As many
as 4 lakh people, mostly daily wagers, may have either lost their jobs or shunned work temporarily
due to the lack of payment so far, and the number is only going to grow if the cash crunch persists.
8.Impact of Demonetisation on Black Money
As outlined in the first post on What is Demonetization of Currency, fighting black money rampant
in the economy was one of the foremost objectives of this entire exercise and we will discuss in
detail whether this objective was realised or not.
If you read the above post, you will know that cash component forms just 6% of the black money in
the Indian economy and currency demonetization will target just this 6% black income. If various
reports are anything to go by, most of this black income has been converted into white by depositing
it in Jan Dhan accounts, depositing in individuals own accounts by breaking into smaller chunks, by
exchanging for new currency notes through hawala dealers, by buying last-minute luxury items like
jewellery and high priced mobiles, by paying advance wages to employees etc.

21
This is supported by the fact that almost the entire amount of Rs 14.18 lac crores in Rs 500 and Rs
1000 currency denominations lying with the public has returned to the banks at the time of writing
this post. This implies that the dividend which the govt. Has been hoping for by way of 2-3 lac crores
not returning to the banking system (since it is black money and/or counterfeit currency) has turned
out to be a mirage.
Also as per various announcements by the govt. From time to time that deposits by housewives and
those exempt from tax will not be scrutinized has provided a way out for black money hoarders to
convert their money into white.
However there have also been some positive impacts like one time removal of counterfeit or fake
currency from the economic system. Some people argue that since black money has reduced, prices
of black money intensive sectors like real estate and gold jewellery will go down. This remains to be
seen.
But demonetisation cannot and will not prevent future generation of black money since black money
problem is more of a cultural mindset in India than a legal problem.
It will also be easier for the corrupt and black money hoarders to deal in Rs 2000 currency notes as
compared to Rs 500 and Rs 1000 notes since higher currency value can now be carried with greater
ease.
A total of Rs 3185 crores in black money of which Rs 86 crores in new notes has been seized by the
Income Tax authorities since the launch of the demonetisation drive on 8th November. This implies
that on the one hand black money is getting unearthed and on the other leakage of new currency
notes is taking place; most probably through the banking system itself.
9.Impact of Demonetisation on Terror Funding and Fake Currency
This was another stated objective of the currency demonetization drive of the government. While
initial reports suggest that terror related activities in J&K witnessed a noticeable halt in the days
following the demonetisation drive, including, stone pelting by misguided youths; the recent Nagrota
attack shows that terrorism is continuing in the valley. Although the availability of cash has surely
declined among the terror groups presently.
The govt. Also claimed that the new currency notes contain very high security features and are
almost impossible to replicate. But this claim does not seem to be true since many stories of
counterfeit currency have come to light since the note ban was announced on November 8th.
However in the short term, circulation of fake currency has definitely slowed down considerably
since the infrastructure set up to print fake currency notes in neighbouring countries like Pakistan has
been rendered useless by the demonetisation drive.
10.Impact of Demonetisation on Cashless Transactions
As already explained above that cashless transactions account for only 10% of all transactions on
daily basis. The government in order to divert some of the blame for the poor implementation of this

22
demonetization exercise announced mid-way that making India a cashless or less cash economy was
one of the important objectives of this demonetization drive. Towards this end, the Finance ministry,
RBI and NITI Aayog announced a host of incentives to boost cashless transactions. This was also
done to ease some of the problems that have resulted due to acute shortage of cash in the economy.
Some of these incentives include:
 No Service Tax on cashless transactions below Rs 2000
 Providing cash backs ranging from 0.25-0.75 percent on various transactions like paying for
fuel, govt utility bills, stamp papers, property registrations etc.
 Encouraging use of Point-of-Sale (pos) machines and mobile wallets like paytm by
businesses and individuals
 Reducing self-assessment tax from 8% to 6% on businesses with annual turnover of less than
Rs 2 crores
 Announcing monthly jackpots for people using cashless transactions in govt services
Impact on NIFTY
NIFTY index is considered as barometer of Indian economy ,Demonetization is expected to have an
adverse impact on overall economic activities. During the aftermath of demonetization severe cash
crunch has been experienced by people, small businessmen, small and medium scale industries as
well as by large companies. Reduced liquidity caused a sharp decline in availability of disposable
income that resulted into sharp fall in demand of various products and put the economic activities on
hold. Because of this, demonetization was expected to have an adverse impact on stock market. Data
shows that as expected, NIFTY responded adversely to demonetization. Average closing price of
NIFTY for 30 days after the demonetization is5.78% lower than the average closing prices for 30
daysbefore the demonetization (Refer to table 1). The absolute fall in NIFTY after one month of
demonetization is 5.64%.Demonetization also made NIFTY more volatile. Thevolatility for 30 days
after demonetization is more than the volatility before, by 31.02%. Chart 3 shows that the impact of
demonetization on NIFTY diluted gradually over the period of second and third week. Result of
paired t-test indicates that at 5% significance level the impact of demonetization on NIFTY is
statistically significant. Based on above it can be said that demonetization has significant negative
impact on NIFY for short term of one month.
Impact on Auto Sector
In terms of impact of demonetization on Automobile industry of India it was expected that the
demonetization will adversely affect the cash transactions in Indian automobile industry especially
for two-wheelers and used car market where most of transactions are cash driven. Further it was
expected that demonetization will have significant impact on automobile sector in rural and semi

23
urban regions that caters mostly to two-wheelers and used vehicle markets. As expected, Auto Index
of NSE responded negatively to the announcement and average closing price during 30 days post
demonetization fell by 10.34%. Among all the indices under this study the third largest negative
impact is one auto index. Absolute decline in auto index after one month of announcement is
10.58%. As in case of NIFTY, the extent of impact on auto index also declined gradually after one
week. The volatility of Auto index increased by 79.39%. At 5% significance level I failed to accept
null hypothesis, this indicates that demonetization had statistically significant impact on Auto Index
of NSE over the period of one month.
Impact on Banking Sector
Demonetization resulted into large deposits of Rs. 500and Rs.1000 rupee notes with the Banks.
Many people have also deposited their black money with the banks to convert it into white money. It
was expected that demonetization will bring large amount of cash in circulation within the purview
of formal banking system through deposits. Huge inflow of deposits in banks was expected to
improve liquidity position of banks, which can be leveraged by the banks for further lending
purposes. This entire move was expected to benefit banks by reducing its dependence on high cost
borrowings.However in short run Banking sector index of NSE responded negatively to
demonetization as evidenced by 4.25% decline in average closing prices for 30 days after
demonetization and an absolute decline of 7.26% after one month of announcement. Contrary to
NIFTY and Auto index, the impact on banking index has increased gradually during second and third
week. The volatility of banking index increased by 107.79%, this is the largest increase in volatility
among the selected indices for this study. At 5% significance level the impact on banking index is
statistically significant.
Impact on Financial Services
Due to liquidity crunch and panic among the investors it was expected that there would be short run
downfall in demand of financial and investment products. Led by this financial service index of NSE
experienced sharp decline of 8.59% over the period of one month of demonetization. Average
closing price for 30 days after the demonetization is lower than average closing price for 30 days
before demonetization by 5.89%. The extent of volatility during post demonetization has increased
by 67.85%. As in case of banking index the extent of impact increased gradually during second and
third phase.

24

25
An analysis of NSE data indeed indicates so. We study the price movements of major sectoral
indices at NSE. These include: automobile, consumption, realty and banking sectors.
Figure 1: Mean Sectoral returns pre and post demonetisation
THE SECTORALIMPACT-
The worst hit sectors by demonetisation are automobile, consumer and the realty sector. The
banking sector, on the other hand, has had a differential impact. The automobile sector has recorded
the highest plunge in mean returns following demonetisation. More importantly, all purchases,
except two-wheelers, have mandated PAN card disclosure in the automobile industry. This had
allowed cash transactions for buying two wheelers. With demonetisation, a reduction in cash
transactions has restrained the demand for two-wheelers and has had a short run adverse impact on
the industry. Secondly, luxury car segments have been a safe haven for spending unaccounted
money. With demonetisation and massive withdrawal of money in circulation, the sector is likely to
have a significant impact, with the resultant impact being seen in the index.
CONSUMPTION AND FMCG-
Nifty India Consumption Index witnessed a decline of 0.86% after demonetisation. A subset of the
Nifty India Consumption Index, FMCG (Fast moving consumer goods) has reduced by almost 1%
post demonetisation. The Nifty India Consumption Index is designed to reflect the behaviour of
sectors such as consumer durables, healthcare, auto, hotels and so on. The sudden drop in money
supply and increased incidence of deposits have had an adverse effect on consumption in the
economy. This sudden demand reduction further leads to a multiplier effect due to decline in
consumer confidence. With consumers preferring to hold cash in hand, consumers will stick to

26
purchasing necessities and postpone/cancel buying premium FMCG products. Similarly, producers
will curb production in order to avoid stock pile up. Both these channels have hampered the sector.
The mean return of realty sector post demonetisation is 0.81% lower than pre demonetisation period.
Property is another dominant route for storing black money. This coupled with a multilayered tax
system (Stamp duty and registration charges, VAT and Service Tax), the sale price of properties is
generally higher than the documented price. Besides, the incidence of property undervaluation is
very high in secondary markets. Demonetisation may navigate this sector to a more organised
system. However, the short-term reduced volumes in resale market and reduced demand has
put downward pressure on land prices.
Finance sector upside
Despite the wide ambiguity on the effects of demonetisation in the economy, one opinion that is
unanimous in the country is its positive influence on the banking sector. With a rise in deposits both
for current and savings accountsand falling interest rates, demonetisation is expected to spur liquidity
and treasury gains. However, Table 1 indicates that the average post demonetisation returns for the
banking sector is 0.49% less than the return before demonetisation. Does this imply that the banking
sector has in fact been hurt due to demonetisation? This requires segregating the sector into the
public and private segments.
We see that the public banking sector recorded a higher average return of the order of 0.24% post
demonetisation. This rise could be attributed to the fact that public banks have a major
share (approximately 80% as of March 2016) in Jan Dhan Yojna accounts. With the old Rs 500 and
Rs 1000 notes becoming invalid, these accounts and hence the public sector banks may witness a
huge inflow of deposits. The private banking sector, in contrast, witnessed negative impact, a drop of
0.74% due to demonetisation. One possible reason may be that due to the intertwined structure of
various sectors with banking, the peril impact of demonetisation on sectors as real estate,
automobiles and consumption (see Figure 1) has percolated to the banking (private) sector.
However, the public sector banks, cushioned by soft budget constraints and financial backing by the
government during adverse times, are protected from this spillover effect. Another reason for the
opposite effect across the two banking segments may be due to the base effect for public banks since
the profitability of public banks is one-fourth of the private banks. To summarise, although public
sector banks have reflected positive returns post demonetisation, the effect is not strong enough to
offset the negative impact on the private banking sector.
Real Estate
It will be one of the most affected sectors. Everyone believes the same and hence the Nifty Realty
Index closed at 175.2, down 11.60%.It is a popular bet in the fresh and resale market dominated by
black money holders. The number of buyers will come down and low demand will bring about lower
prices in the short term. However, it will subsequently help in improving the sector’s prospects.
Unorganised builders will be most affected and the sector will drag down cement and ceramic
sectors also along with it.

27
Adverse impact likely
Average returns on most sectors that have been discussed have exhibited negative values. Public
sector banking segment is the only segment that has recorded a rise in returns. The positive market
sentiment associated with public sector banks may also be due to the initiative taken by this segment
in the planning and execution of recalibration after the private banks bowed out.
The role of cash transactions in an informal economy is critical. With 86% of the monetary base
being washed off, economic activity in the short run is likely to be adversely impacted. The wide
spread negative returns across sectors after demonetisation reflect the immediate negative sentiments
attached with the overall economic activity. However, with Jean Dréze calling demonetisation a big
gamble for India, the possibility of a favourable outcome cannot be ruled out. The possibility of these
effects being temporary may seem to be a ray of hope.

28
Q4
Source: Macrobond, RabobankFigure 3: Lower real estate activity has been counterbalanced
by higher

29
CHAPTER-2
COMPANY PROFILE

30
COMPANY PROFILE-
ODISHA CAPITAL MARKET & ENTERPRISES LTD.
(Formerly Bhubaneswar Stock Exchange)
BACKGROUND
Bhubaneswar Stock Exchange Ltd. (BHSE) which had been functioning as a recognized stock
exchange in state of Odisha since the year 1989, had taken the initiative to introduce stock exchange
in Odisha but it took exit as a stock exchange w.e.f. February 09, 2015 pursuant to exit policy of
Securities and Exchange Board of India (SEBI) for non-performing stock exchanges in the country.
In this context, SEBI has issued an order on February 09, 2015 for exit of BHSE as a stock exchange
after ensuring compliance of various formalities by BHSE associated with such exit process. SEBI
in its said order had directed BHSE, among other requirements, to change its name and not to use
said expression “Stock Exchange” or any variant of this expression in its name.
MANAGEMENT-
The affairs of the company are controlled and supervised by the Board of Directors under the
provision of its Memorandum and articles of Association. The duties and responsibilities of day to
day management and affairs of the company are vested with Mr. Thomas Mathew, Director, who is
assisted by a team of managerial by a team and other employees of the company.
BUSINESS OPERATION-
Odisha capital Market & Enterprises Ltd. In terms of its altered Memorandum of Association is now
taking steps to carry on different activities in the domain of capital market. More particularly, it is
committed to carry on campaigning financial literacy for financial inclusion in the state in addition to
working for assisting financciak education as were discharged by the BHSE as a stock exchange.
CURENT ACTIVITIES OTHER THAN BUSINESS OPERATION-
Apart from business operation, the company is engaged in promotion and development of other
activities in the interest of the investing public in capital market in a big way such as,

31
INVESTORS’ AWARENESS PROGRAMME-
The company is conducting investors’ awareness by programmes by way of seminar, workshops
from time to time for education and awareness of investing public in securities. The aim of the
company is to have as many as awareness programmes in a year at different locations of the state of
Odisha.
SECURITIES MARKET TRAINING PROGRAMME-
The company is providing a Certificate Course, namely, “Basics of Capital Market”.
With the expansion of capital market which includes the reach of its activities in the form of course
contents at various B-schools and +2 commerce level schools, particularly oriented education
programme in security market activities is in increasing demand now days as it promises youth to
make career in the field of securities market. The company aims at undertaking practical oriented
training programmes for the students of commerce and B-schools in a big way as well as for the
youths who want to make their career in securities market. At present, the company is engaged in
imparting training to the students of various management institutes.
STUDENTS ASSISTANCE PROGRAMME-
The students of various institutes and B-Schools require preparing papers on different topics
including the topics related to activities in Stock Exchange and securities market. The students of a
number of Institute and B-Schools visit the company either directly or sponsored by their institutes
every year for assistance in preparation of their project papers. The company assist and supports
those students in their research work by providing necessary guidance and securities market
information.

32
CHAPTER-3
Literature Review

33
Literature Review
As not much literature is available on this topic, it motivates the author to do research on this
topic and contribute into the scarce literature. On 8th November 2016, PM Narendra Modi
announced the cancellation of Rs. 500 and 1000 notes which resulted in 86% of the circulated
money being removed from the economy overnight. As demonetization affect every sector of the
economy, but here we are analyzing the impact of demonetization on the stock
market.
 As per the credit rating report, 2016 demonetization affect the stock market. The study took the
data period from 1st October 2016 to November 8th and than November 8th to 23rd December.
The study analysed the stock prices of all the sector and found that consumer durable, healthcare,
auto industry, banks and real estate affected more (Care Ratings, 2016).
1.Bhardwaz et.al. (2017)
analysed the impact of demonetization on the stockmarket by using efficient market hypothesis. The
study took 16 companies from National Stock Exchange, India from 2012-2016. The study found a
significant impact of demonetization on the stock market and also observed some fluctuations.
2.Veerakumar, K.(2017)
analysed the impact of demonetization on the public perception. The study found that gender, age,
occupation and annual income have significant impact association with demonetization. The study
also found that demonetization will help to destroy black money, corruption and terrorism.
3.Kaur, M.(2017)
has analysed the impact of demonetization on the cashless payment system. The study found that
rising use of credit cards, debit cards, online banking and other online payment
transaction was due to demonetization.
4.Bansal, C. J. (2017)
analysed the impact of demonetization on Indian economy. The study analysed the impact on
manufacturing, service and agriculture sector. The result showed that only agriculture sector grows
positively while manufacturing and service sectors were crashed
down.
5.Mahajan, P., & Singla, A. (2017)
examined the impact of demonetization on financialinclusion in
India. The study analysed demonetization effects onordinary people, informal sectors, NBFC-
MFIs, MSMEs and E-wallet companies. The findings ofthe study show that ordinary people were
the most affected. The above-given literature shows that impact of dem
onetization has been analysed in most of the sectors of India. While a little amount of literature is
found over the stock market. It gives motivation to the author to evaluate the impact of
demonetization.

34
CHAPTER-4
RESEARCH METHODOLOGY

35
RESEARCH METHODOLOGY-
RESEARCH DESIGN-
TYPES OF RESEARCH-
Descriptive research. It includes surveys and fact-finding enquiries of different kinds. Major purpose
of descriptive research is purely description of state of affairs, as it exists as the present. The main
characteristic of this method is that the researcher has no control over the variables; he can only
report what has happened or what is happening.
DATA COLLECTIONMETHODS/SOURCES-
There are two sources of data collection.
1. Primary Data
2. Secondary Data
Primary Data-
Primary data are those which are collected afresh and for the first time. Here the primary data re
collected through questionnaires.
Secondary Data-.
The secondary data means data those are already available. In this project secondary data were used.
The various sources are as under-
1.Books, magazines, newspapers i.e. Books like Security Analysis by S. Kevin, newspapers like
India Mirror, Economic Times, Business Standard.
2.Reports prepared by Goldmansachs, MorganStanley, Indian Infoline.
3.Other websites like Websites i.e.
www.investing.com,www.moneycontrol.com,www.Motilaloswal.com

36
SURVEY APPROACH-
SURVEY RESEARCH-Survey research is used to learn about need satisfaction and awareness levelof the
customers of online share trading.The method used by me is survey method as the research done is
Descriptive approach.
RESEARCH INSTRUMENT-
Selected instrument for data collection for survey is Structured Questionnaire.
Questionnaires- It consists of set of question presented to respondent for their answers .It can be closed ended
or open ended.
Close Ended-Pre specify all possible answers and easy to interpret and tabulate and facilitate a deeper
understanding of the issue at hand.
TYPES OF QUESTIONS INCLUDED-
1.Dichotomous questions-Which has only two answers “YES” or “NO”, and some other options.2
2.Multiple choice questions-Where respondents are offered more than two options.
3.Sampling paln-After deciding on research approach and instrument,the marketing researcher must
design a sampling paln.This includes
 SAMPLING UNIT-The sample unit taken by me are general individual customers.
 SAMPLE SIZE-Sample size is 100
 SAMPLING PROCEDURE-Sampling is done on basis of area sampling for Bhubaneswar
City.In which convenient sampling was done. I had visited all respondents individually and
some of were contacted via google survey forms and collected information via questionnaire.
I used to talk with them and in talk i asked them relevant questions of the questionnaire so i
could get correct information from them for objective purpose.For some questions, i have to
explain them about company,like different plans of the company etc.Generally most of the
respondents had filled questionnaire themselves but some avoid filling up so that time myself
filled accordinf to their answer.
ANALYSIS OF THE INFORMATION-After the data have been collected, the researcher turns to
the task of analysis the.The analysis of data requires a number of closely related operations such as
establishment of categories,then application of these categories to raw data through coding,
tabulaton, statistical inferences.The data are tabulated and presented through graphs and charts.
Interpretation of survey-Based on collected information,the analysis is done.The questionnaire
used by me is given.

37
CHAPTER-5
DATA ANALYSIS
INTERPRETATION

38
DATA ANALYSIS AND INTERPRETATION-
Analysis in the year 2017 onDemonetization-
Demographic Analysis-
Gender-
Gender No. Of respondents Percentage
Male 62 62%
Female 38 38%
Total 100 100%
Table-1
Picture-1
Interpretation-From this above chart, the survey covers 62% of male and 38% female respondents.
62%
38%
Gender in percenatage %
male
famale

39
Observation- From this above chart, it is observed that the percentage of male respondents are
higher than female respondents.
Age-
Table-2
Picture-2
Interpretation-As people invest money in market, the above chart based on the age group of people
who invest in market. This survey covers age group based on from 26-35 are 37% ,the age group
from 19-25 are 29% while above 46 age group are 12% .
Observation-
 From this chart, it is observed that the age group of 26-35 are more in numbers with 37%
while above 46 age group securing least which is only 12%.
 The youth are more in numbers; are more participating in survey while above 46 are less
participating.
29%
37%
22%
12%
Age in Percentage %
19-25
26-35
36-45
46 and above
Age No. of respondents Percentage %
19-25 29 29%
26-35 37 37%
36-45 22 22%
45 onwards 12 12%
Total 100 100%

40
Occupation-
Occupation No. of respondents Percentage%
Student 21 21%
Business 16 16%
Service 21 21%
Professionals 24 24%
Others 18 18%
Total 100 100%
Table-3
PICTURE-3
21%
16%
21%
24%
18%
Occupation in Percentage%
student
business
services
professionals
others

41
Interpretation-The above chart shows the diversification of people according to their designation,
the survey covers mostly professionals with 24% and people from service background are lesser than
professionals with 21%.The business personals are 18%.
Observation-
 From this above chart, it is observed that the survey covers, mostly the respondents are
professionals while 18% are related to student background.
 It can be said that Odisha people are more oriented for getting jobs while 16% respondents
prefer Business.
 Incase of Gujurat most people are related to business that’s why Gujurat economy is more
growing than Odisha.
4.Income-
Table-4
Income No. Of respondents In percentage %
Up to 1 lakh 20 20%
1 lakh to 2 lakh 23 23%
5 lakh onwards 14 14%
Total 100 100%

42
Interpretation-This above chart shows the diversification of people based on their income hence it
is shown that 23% of people, income level of 1 lakh to 2 lakh are more in numbers to invest in
market and 14% of income level of upto 1 lakh are the least.
Observation-
 From this above chart, it is observed that 23% respondents have income level of 1 lakh to 2
lakh.
 It means that in Odisha, most people generate an income of 1 lakh to 2lakh thats why people
likely to give more preference to livelihood
 But with income level of 5 lakh and onwards is least with 14% where people may save
somehow more than them after spending on livelihood.
1. (A). Do you save money?
OPTIONS NO. OF RESPONDENTS PERCENTAGE%
YES 94 94%
NO 6 6%
TOTAL 100 100%
Table-5
20%
23%
21%
22%
14%
Income in percentage%
up to 1 lakh
1 lakh to 2 lakh
2 lakh to 3 lakh
3 lakh to 5 lakh
5 lakh onwards

43
Picture-5
Interpretation- The above chart shows that 94% of people save money while 6% people don’t save
money at all according to their opinions.
Observation-
 From this above chart, it is observed that, 94% of respondents save money where most of
them have an income level of 1 lakh to 3 lakh, which may spend most of their income on
livelihood.
 The rest of income may goes as savings and which may be utilised as Fixed Deposits and
Insurance, postal deposits, chances of utilising them as Share purchasing is least.
 The rest 6% don’t save money at all, here most of them may be students and rest of them
have income level of upto 1 lakh which have less chances to invest in market.
 For the age group from 19-25 are most likely to be students and their saving is almost zero
while the chance of utilising of saving money is null.
1.(b).what do you do with your savings?
Options No. of
respondent
Options No of
respondents
Options No. of
respondent
Fixed
deposits 5
Fixed deposits+
Mutual funds 5
Fixed deposits+
Mutual funds+
Stock market
10
Mutual
funds 3
Fixed deposits+
Stock market 5
Fixed deposits+
Mutual funds+
Real- estate
6
94%
6%
PERCENTAGE
YES
NO

44
Stock
market 5
Fixed deposits+
Real-estate 4
Fixed deposits+
Stock market+
Real estate
6
Real-
estate 2
Mutual funds+
Stock market 4
Stock market+
Real estate+
Mutual funds
4
Mutual funds+
Real-estate 3
Stock market+
Real estate 2
All the 4
options 30 ( including Fixed Deposits, Mutual Funds, stock market, Real-eastate)
Total
15+30=45 23 26
SUB-
TOTAL 45+23+26=94 (i.e. 15 was for only one option, 23 was any two options chosen, 26
are any 3 options were chosen and 30s are all 4 options chosen by respondent)
Table-6
*Note-While surveying people, out of 100 of respondents, 94 respondents opted for saving
money while 6 opted for not saving money at all. This above table shows that the survey covers
94 respondents who opted for saving money. This above table shows their choices of investing
areas. Here out of 94 respondents 66 respondents opted for investing in stock market.
Total-15

45
Picture-6
Interpretation-The above chart shows that 33% of people are more likely to invest in the
combination of FDS+MFS+SM+RE (All the above option).
Observation-
 From this above chart, it is observed that, It is observed that, most people are in favour of
doing Fixed Deposits rather than investing in stock market.
 Some people are more prone to doing Fixed Deposits and mutual funds to get more returns.
To diversify risk people invest in Fixed Deposits, Mutual Funds, Stock market, Real-estate
to get better returns.
 Here the youths the age group of 19-25 & 26-35 are most likely to invest in Mutual funds and
stock market as they can adopt more risks but in case of age group of more than 26 age
group are less likely to adopt risks so they invest in Fixed deposits and Real-estate.
5%
3%
5%
2%
5%
5%
4%
4%
3%
2%
11%
7%
6%
4%
33%
Percentage%
FIXED DEPOSITS
MUTUAL FUNDS
STOCK MARKET
REAL-ESTATE
FDs+MFS
FDS+SMS
FDS+RE
MFS+SM
MFS+RE
SM+RE
FDS+MFS+SM
FDS+MFS+RE
FDS+SM+RE
SM+RE+MFS
ALL THE ABOVE

46
 In case of gender diversification, the male are more prone to risk taking and the professional
background people are more in to stock market here.
1.(c). If you don’t utilise your savings, reasons for keeping it idle.
Options No. of respondents
For emergency issues 1
Due to high volatility 1
Lack of investment knowledge 2
Lack of interest to invest 0
All the above 2
Total 6
Table -7
Interpretation-This above chart shows that the respondents who do not invest the saving money,
33% of people went for the option “all the above” which is the combination of all options and lack of
investment knowledge.
17%
17%
33%
0%
33%
for emergency issues
due to high volatility
lack of investment knowledge
lack of interest to invest
all the above

47
Observation-
 From this above chart, it is observed that 33% of respondents agree that lack of investment
knowledge leads to not investing in stock market.
 Some respondents agree about keeping it idle for emergency issues where nobody went for
lack for interest to invest as the people are more prone to lack of knowledge that’s why
people fear to invest in market.
 In case of gender diversification, the male are more prone to not utilising their savings while
the youths are less likely to invest in market.
2.(A). Do you invest in stock market?
OPTIONS NO. OF RESPONDENTS
YES 66
NO 28
TOTAL 94
TABLE-8
Picture-8
Interpretation- From this above chart, it shows that, out of 94 respondents 72% opted for investing
in stock market, while 28% opted for not investing in stock market.
72%
28%
YES
NO

48
Observation- From this above chart, it is observed that, 66% respondents agree that they go for
investing in stock market while rest 28% are not investing in stock market as they may not want to
take risks, do not have investment knowledge or else they prefer doing investment in Fixed
Deposits, Real-estate, Mutual funds.
2.(B). If yes, reasons for investing in stock market.
For high end returns 21
To save for uncertain future 18
Passion for investing money 8
All the above 19
Total 66
TABLE-9
Picture-9
Interpretation- From this above chart, it is shown that 32% of respondents opted for high end
returns, while passion for investing money got the lowest of 12%.
32%
27%
12%
29%
for high end return
to save for uncertain future
passion for investing money
all the above

49
Observation-
 From this above chart, it is observed that 32% respondents opted for high end returns as
investment in stock market generate high profits than Fixed Deposits and Mutual Funds in
less time.
 Only12% opted for passion for investing money as most people with higher income will do
expenditure on luxury uses and investing in stock market is considered as higher status so
people with higher income will tend to opt for passion for investing money.
 Some people went for saving for uncertain future as high profits can be generated in less time
in stock market so better scope for saving for uncertain future.
 Here the age group 19-25 and 26-35 are more prone to risk taking hence they chose investing
in stock market.
2.(C). If no, reasons for not investing in stock market.
Lack of knowledge & fear of losing money 9
Investing in hard assets 7
Unable to forecast 3
All the above 9
Total 28
Table-10
*Note-Here out of 94 people, 28 people denied about investing in stock market.
Picture-10
44%
35%
15%
6%
Lack of knowledge & fear of
losing money
Investing in hard assets
Unable to forecast
All the above

50
Interpretation-From this above chart, it is shown that 44% of respondents opted for lack of
knowledge and fear of losing money is the key reason for not investing and 35% admitted that they
invest in hard assets.
Observation-
 From this above chart, it is observed that, 35% of respondents opted for investing in hard
assets as the prices of land and metals, precious stones are getting higher day by day.
 While investing in hard assets are never a loss decision, 44% people prefer that lack of
knowledge and fear of losing money is the key reason for many people to not investing in
stock market.
 Only 15% people went for unable to forecast as the stock market is highly volatile and day by
day fluctuations of prices may be the reason.
3. How long you are investing in stock market?
Options No. Of respondents
Below 1 year 34
1 year to 2 years 15
2 years to 5 years 11
5 years and above 6
Total 66
Table-11

51
Picture-11
Interpretation-From this above chart ,it is shown that 51% of respondents have selected the option
of below 1 year and 23% went for 1 year to 2 years.
Observation-
 51% of respondents tell that investing in stock market for less than1 year as most people
invest usually out of excitement , also they may go for investing in stock market out of greed
as there is higher returns than other areas and sometimes they get losses. They withdraw
themselves to invest in stock market.
 And others are regular in investing in stock market so they have more duration than the rest
51%.
 The age group of 19-25 and 26-35 are those who are investing upto 1 year, while the age
group of more than 35 are investing more than 3 years.
4. How much percentage of your income you invest in stock market?
Below 25% 38
26% to 50% 14
51% to 75% 9
76% & above 5
Total 66
51%
23%
17%
9%
Below 1 year
1 year to 2 years
2 years to 5 years
5 years and above

52
Table-12
Picture-12
Interpretation-From this above group, it is shown that the upto-25% of income level of
respondents are more likely to invest in stock market with highest of 58% while 7% are least of with
income level of 76% and above.
Observation-
 From this above chat, it is observed that, 58% of respondents are investing in stock market
upto 25% of their income as it was previously seen that most people are with range of 1 lakh
to 2 lakhs income , people are less likely to invest in stock market after spending on basic
needs.
 Income level of 26% to 50% and 51% to 75% are those who have income of more than 3lakh
income and those with more than 75% income level are earning more than 75% so they may
be saving heavily and using them as investing in stock market.
58%
21%
14%
7%
upto 25%
26% to 50%
51% to 75%
76% and above

53
5. In which sector do you invest most?
Banking 41
IT 11
Telecom 8
Petroleum 1
Others 5
Total 66
Table-13
Picture-13
Interpretation-From this above chart, we got to know that 62% of respondents usually invest in
Banking sector, where 17% of people invest in IT sector and 1% goes for Petroleum.
62%
17%
12%
1%
8%
banking
IT
telecom
petroleum
others

54
Observation-
 From this above chart, it is observed that, 8% of respondents opted for other sector there they
opted for steel sector and cement, diagnosis centre mostly as they never lose a trend and the
demand of these sectors are high.
 while 62% opted for banking as India is a service sector based economy and numbers of
banks establishing everyday may be the key reasons for investors to invest in banking.
 Only17% people opted for investing IT as India generates highest in IT services than other
sectors.
 Due to fluctuations of prices of crude oil, people may not want to invest in Petroleum sector.
6. (a). How much percentage of your income is invested after demonetization?
Upto 25% 41
26% to 50% 17
51% to 75% 6
76% and above 2
Total 66
Picture-14

55
Picture-14
Interpretation-From this above chart shows that, the group of Upto 25% of income invest post
demonetization. It was seen that, the group of 51% to 75% and 76% and above got largely dropped.
Observation-
 From this above chart, it is observed that post demonetization due to less purchasing power of
people and reduction on interest rates and fluctuations of prices,there was a change in
investment pattern.
 While people who use to invest more than 50% reduced to up to 25% as the circulation of
cash was less and people like to spend on their basic needs first.
 The people who use to invest more than 76% of their income dropped to other categories due
to volatility.
6.(b). Reasons for increase in investment in stock market post demonetization.
Scope for better return 7
Better mobilising of funds 5
Stability of market 1
All the above 14
Total 27
Table-15
62%
26%
9%
3%
up to 25%
26% to 50%
51% to 75%
76% and above

56
Picture-15
Interpretation-From this above chart, it is shown that 52% opted for the option “All the above” for
increase in investment post demonetization and 4% opted for “Better mobilising of funds”.
Observation-
 From this above chart, it is observed that, only those who have better knowledge and are
regular in investing in share market,have increased their invest post demonetization.
 Only 26% of respondents opted for better returns as the market did not go down much and
was bearish for a short time and losing money was not so easy there.
 Only 18% opted for stability of market as since Narendra Modi became prime-minister of
India, the market is going good even after demonetization it did not crash
much after a short economy cycle.
26%
18%
4%
52%
scope for better return
stability of market
better mobilising of funds
all the above

57
6.(C). Reasons for decrease in investment in stock market post demonetization.
High risk factor 7
Fluctuation of shares of prices 12
Comparative better return from other areas 5
All the above 15
Total 39
Table--16
Picture-16
Interpretation-From this above graph, 38% of respondents opted for “All the above” and 13% went
for comparative better return from other areas which is least.
Observation-
 From this above chart, it is observed that, 38% of respondents opted for all options as the
market was little down after demonetization and the impact of winning of Donald Trump was
also there so people prefer to decrease in investment in stock market.
19%
30%
13%
38%
high risk factor
fluctiuations of prices of shares
comparative better return from
other areas
all the above

58
 While 30% opted for fluctuation of share price as the trend was bearish so people went for
investment less than usual.
7. (A). Does your broker advices you to invest/divest in certain areas post
demonetization?
Table-17
Picture-17
Interpretation-From this above chart, we got to know that, 82% of respondents agrees to “to get
advised by brokers while 18% opted for not taking advices from broker.
Observation-
From this above chart, it is observed that, 82% opted that they invest according to broker’s advices
as people trust brokers because brokers know much things about market, which sectors to invest or
not, when to invest when not to invest, how much is the risk factor and which one have more returns.
18% of respondents who do not believe brokers because their investment on lose side .
82%
18%
YES
NO
Yes 54
No 12
Total 66

59
7.(b) In which areas your broker advises you to invest post demonetization?
Banking 27
IT 10
Telecom 4
Petroleum 1
Others 12
Total 54
Table-18
NOTE-Here, out of 66 respondents, 54 opted for getting advised by brokers while 12 denied.
This above table specifies on 54 respondents only.
Picture-18
50%
19%
7%
2%
22%
banking
IT
telecom
petroleum
others

60
Interpretation-From this above chart, it is shown that 50% opted for investing in banking mostly
post demonetization on the advice of broker while 2% opted for petroleum.
Observation-
 From this above chart, it is observed that more people think that investing in banking sector
will generate returns as the banking sectors generate profits and may able to pay dividend to
people in time due to trust.
 Only 19% go for IT sectors as they generate more profits than other sectors.
 There was a huge drop in investing in petroleum and telecom sector as they are highly
volatile.
 The people shifted to other sectors to get stability of dividend.
On Banking sector-
 The banking sector took an immediate hit the day after demonetization but recovered after
10th of November. But it has been subsequently correcting as it is still grappling with trying
to replenish the cash in economy.
 This is expected to grow as a lot of black money will be deposited in bank and excess of
funds will lead to address the non-performing assets, that many banks are facing due to bad
debts.
The trend after demonetization of banking sector
On IT sector-
 The It sector has been largely un-affected by the demonetization as it is export oriented and
hence relatively better positioned to handle shocks in Indian economy.

61
 It is largely based on cashless sctor and so unaffected due to cash being taken out oeconomy.
The trend after demonetization of IT sector
 May be these are the reasons why people has increased their investment in Banking sector
and IT sector which are less affected by Demonetization and will help in better capital
appreciation.
7.(c) In which areas your broker advises you to divest post demonetization?
Banking 4
IT 6
Telecom 14
Petroleum 20
Others 10
Total 54
Table-19
NOTE-Here, out of 66 respondents, 54 opted for getting advised by brokers while 12 denied.
This above table specifies on 54 respondents only.

62
Picture-19
Interpretation-From this above chart, we got to know that 33% people divest in petroleum by
following broker’s advices which is highest and 8% of people divest from banking on broker’s
advices.
On Telecom sector-
May be the decrease in cash circulation can lead to reduction in sales of smart phones which can lead
to slower adoption of telecom subscribers and the war of free data between Telecom companies is
also key point.
On the Petroleum sector-
Due to less cash circulation and the rupee value is decreasing and the crude oil prices depend on
international market which needs the exchange of rupee to Euro, Dollar and due to less appreciation,
the market is quiet down.
Observation-
 From this above chart, it is observed that people who usually in invest in telecom sector, after
Jio introduced free services while other telecom sectors face a huge loss and after
demonetization the scenario became more drastic so it was a drop in telecom sector.
And due to fluctuations of prices of crude oil, the broker advices people not to invest in
petroleum sector.
 While some broker advices to divest in IT sector as the Donald Trump policies for IT people.
So most people invest in banking sector and other areas like infrastructure.
8%
12%
27%
33%
20%
banking
IT
telecom
petroleum
others

63
8.Do you think, investing in FMCG, IT, Pharmaceuticals & Infrastructure sectors will be less
riskier?
Yes 47
No 19
Total 66
Table-20
Picture-20
Interpretation-From this above chart, 71% people opted that investing in Pharmaceuticals,
Infrastructure, IT,FMCG will be less riskier.
Observation-
 From this above chart, it is observed that though infrastructure sector have still demand in
market it may not be a blunder any investor who wants some profits.
 While pharmaceuticals still have more demand which cannot be termininated so people
usually invest in pharmaceuticals sectors to get profits.
71%
29%
YES
NO

64
 While 29% think that investing in these sectors will be less riskier as the assumption thinks
that the demand will decrease and the share prices will be reduced.
9. According to you, does demonetization affect stock market?
Yes 56
No 10
Total 66
Table-20
Picture-20
Interpretation-From this above graph, it is shown that,85% opted that demonetization affects stock
market while 15% said opposite of it.
Observation-
 From this above graph, it is observed that, 85% says that demonetization will affect stock
market as the market did not crash much after demonetization.
 Even after the economy cycle after each 8 years, the market did not crash to its lowest. Those
who said “NO”, it may be the sudden changes post demonetization, de-growth of IT, banking
sector and reduction of GDP may be a key factor.
85%
15%
YES
NO

65
 For those who opted for yes, the trends of stock market did not fall even after 2014 which
was the end of small economy cycle.
 The small economy cycle comes every 8 years. The last time it was seen that there was a
huge depression period in 2008. And it was expecting that it will continue to do even in 2016
10. According to you, does demonetization help in growth of stock market?
Yes 43
No 23
Total 66
Table-21
Picture-21
Interpretation-From this above graph, it is shown that 60% agreed that demonetization will help in
growth of stock market while 40% denied to this.
Observation-
 From this above chart, it is observed that, 60% said that demonetization will help in growth
of stock market as the winning of Donald Trump and demonetization did not make the
market crash much even the Greece crisis.
60%
40%
YES
NO

66
 The Brexit made the market crashed to its lowest point.So 60% thinks that demonetization
will help in growth of stock market.
 While other 40% may admit that the fluctuations of prices of shares, reduction in purchasing
power and money supply.,
 India GDP and stock market trends are better than China even after the 80 years long great
commodity cycle of China.
11. When the stock market crashes, does your mutual fund & equity crash too?
Yes 57
No 9
Total 66
Table-22
Picture-22
Interpretation-From this above chart,we got to know that 86% agreed that when market crashes
their mutual fund and equity also crashes but 14% denied to this.
Observation-
From this above chart, it is observed that 86% says that mutual fund and equity crash when market
crashes as the impact of crashing of market on other areas is more.
86%
14%
YES
NO

67
CHAPTER-6
FINDINGS & SUGGESTION

68
FINDINGS-
1.From this survey, it is found that 62% of respondents are male and 38% female respondents ; it
is observed that the percentage of male respondents are higher than female respondents.
2.From the survey, it is found out that age group based on from 26-35 are 37% ,the age group from
19-25 are 29% while above 46 age group are 12% .
3. The survey shows that, the diversification of people according to their designation, the survey
covers mostly professionals with 24% and people from service background are lesser than
professionals with 21%.The business personals are 18%.while 18% are related to student background
.
4. This survey shows the diversification of people based according to their income hence it is
shown that 23% of people, have an income level of 1 lakh to 2 lakh who are more in numbers to
invest in market and 14% of income level of upto 1 lakh are the least..
5. From this above survey, it is observed that, 94% of respondents save money where most of them
have an income level of 1 lakh to 3 lakh, which may spend most of their income on livelihood.
 The rest 6% don’t save money at all, here most of them may be students and rest of them
have income level of upto 1 lakh which have less chances to invest in market.
 For the age group from 19-25 are most likely to be students and their saving is almost zero
while the chance of utilising of saving money is null.
6. It is found that 33% of people are more likely to invest in the combination of
FDS+MFS+SM+RE (All the above option).
 From this above chart, it is observed that, It is observed that, most people are in favour of
investing in Fixed Deposits rather than investing in stock market.
 Some people are more prone to doing Fixed Deposits and mutual funds to get more returns.
To diversify risk people invest in Fixed Deposits, Mutual Funds, Stock market, Real-estate
to get better returns.
 Here the youths the age group of (19-25) & (26-35) are most likely to invest in Mutual funds
and stock market as they can adopt more risks but in case of age group of more than 26 age
group are less likely to adopt risks so they invest in Fixed deposits and Real-estate.
 In case of gender diversification, the male are more prone to risk taking and the professional
background people are more in to stock market here.

69
7.This surevy shows that the respondents who do not invest the saving money, 33% of people went
for the option “all the above” which is the combination of all options and lack of investment
knowledge.
 It is observed that 33% of respondents agree that lack of investment knowledge leads to not
investing in stock market.
 Some respondents agree about keeping it idle for emergency issues where nobody went for
lack for interest to invest as the people are more prone to lack of knowledge that’s why
people fear to invest in market.
 In case of gender diversification, the male are more prone to not utilising their savings while
the youths are less likely to invest in market.
9. From this survey, it shows that, out of 94 respondents 70% opted for investing in stock market,
while 30% opted for not investing in stock market.
 From this above chart, it is observed that, 66 respondents agree that they go for investing in
stock market while rest 29.7% are not investing in stock market as they do not take risks, do
not have investment knowledge or doing investment in Fixed Deposits, Real-estate, Mutual
funds.
10. From this survey, it is observed that 32% respondents opted for high end returns as investment in
stock market generate high profits than Fixed Deposits and Mutual Funds in less time.
 Only12% went for passion for investing money as most people with higher income
expenditure on luxury uses and investing in stock market is considered as higher status so
people with higher income will tend to opt for passion for investing money.
 Some people went for saving for uncertain future as high profits can be generated in less time
in stock market so better scope for saving for uncertain future.
 Here the age group 19-25 and 26-35 are more prone to risk taking hence they chose investing
in stock market
11. From this above chart, it is observed that, 35% of respondents opted for investing in hard assets
as the prices of land and metals, precious stones are getting higher day by day.
 While investing in hard assets are never a loss decision, 44% people prefer that lack of
knowledge and fear of losing money is the key reason for many people to not investing in
stock market.
 Only 15% people went for unable to forecast as the stock market is highly volatile and day by
day fluctuations of prices may be the reason.
 12% of respondents tell that investing in stock market is below 1 year as most people usually
out of excitement, greed go for investing in stock market out of greed as there is higher
returns than other areas and as they get losses and they withdraw themselves to invest in
stock market.

70
 And others are regular in investing in stock market so they have more duration than the rest
51%.
The age group of 19-25 and 26-35 are those who are investing upto 1 year, while the age
group of more than 35 are investing more than 3 years
12. From this above chat, it is observed that, 58% of respondents are investing in stock
market upto 25% of their income as it was previously seen that most people are with range of
1 lakh to 2 lakhs income , people are less likely to invest in stock market after spending on
basic needs.
 Income level of 26% to 50% and 51% to 75% are those who have income of more than 3lakh
income and those with more than 75% income level are earning more than 75% so they may
be saving heavily and using them as investing in stock market.
13. From this survey, it is shown that 52% opted for the option “All the above” for increase in
investment post demonetization and 4% opted for “Better mobilising of funds”.
 It is observed that, only those who have better knowledge and regular in investing in share
market increased their invest post demonetization.
 Only 26% of respondents opted for better returns as the market did not go down much and
was bearish for a short time and losing money was not so easy there.
 Only 18% opted for stability of market as since Narendra Modi became prime-minister of
India, the market is going good even after demonetization it did not crash
much after a short economy cycle.
14. From this survey, it is observed that, 38% of respondents opted for all options as the market was
little down after demonetization and the impact of winning of Donald Trump was also there so
people prefer to decrease in investment in stock market.
 While 30% opted for fluctuation of share price as the trend was bearish so people thought
invest less than usual.
15. From this survey, it is shown that 50% opted for investing in banking sector mostly post
demonetization on the advice of broker while 2% opted for petroleum.
 It is observed that more people think that investing in banking sector will generate profits as
the banking sectors generate profits and may able to pay dividend to people in time due to
trust.
 Only 19% go for IT sectors as they generate more profits than other sectors.
 There was a huge drop in investing in petroleum and telecom sector as they are highly
volatile.
 The people shifted to other sectors to get stability of dividend.
On Banking sector-

71
 The banking sector took an immediate hit the day after demonetization but recovered after
10th of November. But it has been subsequently correcting as it is still grappling with trying
to replenish the cash in economy.
 This is expected to grow as a lot of black money will be deposited in bank and excess of
funds will lead to address the non-performing assets, that many banks are facing due to bad
debts.
16.From this survey, we got to know that 33% people divest in petroleum by following broker’s
advices which is highest and 8% of people divest from banking on broker’s advices.
On Telecom sector-
May be the decrease in cash circulation can lead to reduction in sales of smart phones which can lead
to slower adoption of telecom subscribers and the war of free data between Telecom companies is
also key point.
On the Petroleum sector-
Due to less cash circulation and the rupee value is decreasing and the crude oil prices depend on
international market which needs the exchange of rupee to Euro, Dollar and due to less appreciation,
the market is quiet down.
 From this above chart, it is observed that people who usually in invest in telecom sector, after
Jio introduced free services other telecom sector face a huge loss and after demonetization the
scenario became more drastic so it was a drop in telecom sector.
 But due to fluctuations of prices of crude oil, the broker advices people not to invest in
petroleum sector.
 While some broker advices to divest in IT sector as the Donald Trump policies for IT people.
So most people invest in banking sector and other areas like infrastructure
17. From this survey, 71% people opted that investing in Pharmaceuticals, Infrastructure, IT,FMCG
will be less riskier.
 It is observed that though infrastructure sector have still demand in market it may not be a
blunder any investor who wants some profits.
 While pharmaceuticals still have more demand which cannot be termininated so people
usually invest in pharmaceuticals sectors to get profits.
 While 29% think that investing in these sectors will be less riskier as the assumption thinks
that the demand will decrease and the share prices will be reduced.
18. From this above graph, it is shown that,85% opted that demonetization affects stock market while
15% said opposite of it.

72
 From this above graph, it is observed that, 85% says that demonetization will affect stock
market as the market did not crash much after demonetization.
 Even after the economy cycle comes each 8 years, the market did not crash to its lowest.
Those who said “NO”, it may be the sudden changes post demonetization, little de-growth of
IT, banking sector and reduction of GDP may be a key factor.
 For those who opted for yes, the trends of stock market did not fall even after 2014 which
was the end of small economy cycle.
 The small economy cycle comes every 8 years. The last time it was seen that there was a
huge depression period in 2008. And it was expecting that it will continue to do even in 2016
19. From this survey, it is shown that 60% agreed that demonetization will help in growth of stock
market while 40% denied to this.
 From this above chart, it is observed that, 60% said that demonetization will help in growth
of stock market as the winning of Donald Trump and demonetization did not make the
market crash much even the Greece crisis.
 The Brexit made the market crashed to its lowest point.So 60% thinks that demonetization
will help in growth of stock market.
 While other 40% may admit that the fluctuations of prices of shares, reduction in purchasing
power and money supply.,
20. From this above chart,we got to know that 86% agreed that when market crashes their mutual
fund and equity also crashes but 14% denied to this, it is observed that 86% says that mutual fund
and equity crash when market crashes as the impact of crashing of market on other areas is more.

73
SUGGESTION-
Though people were least bothered for demonetization but later cashless payment system,lack
of awareness, proper knowledge given to people can help in making a positive winning.Fake
currency is increasing day by day, which could be suppressed but it did not happen. Proper
pre-caution should be needed to curb post demonetization. If proper pre-caution could be
taken before announcing demonetization, people may not had to suffer.
Government should give more focus on cashless payment system, should take steps to
encourage more cashless payments. The problem regarding fake currency in India ,that its
battle against fake currency is not getting easier day by dayand many fakes go undetected.It is
also stated that counterfeiters hitherto had restricted printing facilities but still it is not
suppressed yet.
Cashless payment in India as a roadmap for less complex proposition for the
Government.The country needs to move away from cash-based towards a cashless payment
system.This will help reduce currency management cost,track transactions,check tax
avoidance,frauds and enhance financial inclusion and integrate the parallel economy with
main stream.

74
CHAPTER-7
CONCLUSION & LIMITATION

75
CONCLUSION-
The moves taken by Government was praised heavily by common men but it was criticized by some
scholar people.Though people did not suffer much but GDP was decreasing day by day and our
economy is not upgrading.RBI has not increased interest rate yet so Demonetization has both
positive and negative side. Domestic abuse rates spiked in November, with calls to India’s One Stop
Crisis Centre (OSCC) – a domestic abuse charity – more than doubling the month that Modi
announced demonetization. 50% of the women who received counseling said their abuse was due to
troubles to do with demonetization. India has a culture of women stowing away small sums of cash
without their husbands’ knowing, in cases of emergencies. In a country where the percentage of
work-age women with jobs has fallen by 10% to 27% since 2005 (the largest drop in any country),
for many this cash is a lifeline and the greatest source of control and independence they have. After
demonetization, many women were faced with the choice of losing their money or handing it over to
their husbands.
This isn’t the first time India has tried demonetization, and it very well may not be the last. In 1946,
all 1,000 and 10,000 rupee notes were recalled and in 1978, all 1,000, 5,000 and 10,000 notes were.
That the country has tried this measure two times already suggests both that demonetization isn’t
enough to end corruption and that the new money quickly becomes ‘black money’ again. Yet despite
the IMF cutting India’s growth rate from 7.6% down to 6.6%, Modi has held on to most of his
popularity, with most seeing demonetization as a genuine stand against tax evasion and the black
market. Increased financial inclusion and transparency are of course fantastic goals, and if achieved,
would alleviate poverty and increase productivity, but the question is whether demonetisation is
worth the price Indians have to pay.
We need to see both pros and cons side of demonetization and should take steps for the betterment of
economy. Beyond the falling growth,we need to focus how can we improve our economy like other
countries.

76
LIMITATION-
1.The project is preapared in limitation to the availability of data.
2.The survey was limited to Bhubaneswar area people.
3.People were less aware about stock market.
4.The regulation and procedures to be followed is mentioned according to the R.B.I rules.
5.Most of the participants were least connected with share market investment.
6.Most of respondents were neutral about the impact at first.

77
CHAPTER-8
ANNEXURE & BIBLIOGRAPHY

IMPACT OF DEMONETIZATION ON STOCK MARKET

IMPACT OF DEMONETIZATION ON STOCK MARKET

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