Influence of Demonetization on Indian Ecommerce

To assess the influence of
demonetization on Indian e-
commerce field

Table of Contents
INTRODUCTION...........................................................................................................................1
Main Body.......................................................................................................................................1
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5
.........................................................................................................................................................5

INTRODUCTION
Demonetization is refer to as an act where currency is stripped out form the economy as a
legal tender. This can happen when there is a change in the national currency. Thus, in this action
either the note is discontinued or it is replaced with new currency. Demonetisation is not new as
its history can be traced in the year around 1873 under The Coinage Act, of United States. In this
silver was demonetised and nation adopted gold standards. Recently, in the year 2016, Indian
Government thought of demonetize 500 and 1000 rupee note and this was considered as one of
the big action taken by the regulatory bodies because two biggest denominations were
discontinued as a result, 86% country's circulating cash was affected. Therefore, this assignment
is based on the analysing the impact demonetisation on e-commerce field so as to understand
whether it acted as a positive or negative manner (Agarwal and et. al., 2018).
Main Body
Demonetization is determined as a radical monetary action in which tenders which are
legal are declared as invalid. This generally takes place when government of any nation make
changes in their national currency. However, after this action old notes become null avoid and it
cannot be used for further transaction in any manner. In context with India this step was taken
back in the year 1978 and denominations Rs 1,000, Rs 5,000 and Rs 10,000 were discontinued.
Later, on November 8, 2016, this action was repeated once again Prime Minister of India
Narendra Modi through television address the citizen about making Rs 1,000 and Rs 500 note
made invalid. This move was taken in order to eliminate corruption and black money. Following
action has created a lot of chaos amongst people as they had to stand for a longer period of time
outside bank so as to change their notes of Rs 500 and Rs 1,000. But at the same time new notes
of Rs 2,000 and Rs 500 were introduced. Other than this, Cash Withdrawal was limited as
weekly people can only withdrawal Rs 20,000 which was further increased to upto Rs 24,000.
Henceforth, according to the report released by Reserve Bank of India in the year 2017-2018,
approximately 99.3 percent of money were returned (Annual Report, 2017-2018).
Therefore, economy of India was shifted from informal to formal due to which most of
the e-commerce companies were benefited. E-Commerce websites in India such as Amazon,
Flipkart, Snapdeal etc., accept payment in the form of digital or cash on delivery. Thus, sudden
action of demonetisation turned the whole country into turmoil. This action has bring tremendous
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