India Towards a Cashless Economy

Abstract

This chapter briefly discusses the impact and policy implications of demonetization across the world. The main focus of the chapter is on the demonetization that occurred in India on 8th November 2016. The event is important due to the surprise effect and also due to the huge scale of impact that it had on the economy. The authors make a case for the demonetization from the policymaker's point of view. This chapter will introduce how demonetization has impacted the business sector as well as the financial sector of the economy. The aim of the chapter is not to estimate the impact of demonetization on the economy as whole but rather to discuss the impact of the policy on the different sectors of the economy and different stakeholders of the economy. This chapter would also explore demonetization as a policy tool for tax evasion and corruption. Finally, this chapter will introduce the concept of cashless economies around the world and whether it will be possible for the Indian economy to become a cashless economy anytime in the near future.