Remonetisation and Its Impact on Organized Retail Stores in Karnataka

International Journal of Research and Scientific Innovation (IJRSI) | Volume V, Issue IV, April 2018 | ISSN 2321–2705

Remonetisation and Its Impact on Organized Retail Stores in Karnataka

N.Srikanth Reddy¹, P.V.Raveendra²

  ¹Assistant Professor, Department of Management Studies, RIT, Bangalore, Karnataka, India.
²Head of the Department, Department of Management Studies, RIT, Bangalore, Karnataka, India.

Abstract: 8th November 2017 marks one year of demonetisation and now can only be called as remonetisation as the cash availability has eased in terms of new notes flowing into the economy, however the short term after effects of demonetisation have impacted retail in terms of sales, footfalls etc. Both secondary and primary data were used to understand the events and effects of remonetisation. There were positive effects like fostering of digital economy and tamed inflation, but the major negative issue of liquidity and its effect on retail was studied using primary data. The short-term liquidity crunch lead to discrepancies in retail business activity was found to vary with the type of retail vertical. The impact of liquidity crunch on retail stores was found to have a mixed response.

Keywords: Remonetisation, Demonetisation, Organised retail in Karnataka, Retail Liquidity Crunch.

I. INTRODUCTION

Government of India had a slew of economic reforms like FDI(DIPP, 2017) in retail, GST and demonetisation. India was relatively positive in the retail outlook comparatively like the UAE security threats (Khaleej Times, 2015), Indonesian inflation demon etc (Jakarta Post, 2017). Demonetization is interesting due to its positive and negative effects. Demonetisation can be defined as removal of currency from the economy but if it is followed by a refill of currency from the Government, then it ought to be called as “remonetisation”, which means, the introduction of new currency in to the economy. On 8th November 2016 demonetisation was announced by Government of India. The 500 and 1000 denomination notes were abolished until the new 2000 and 500 notes were made available to the public. The two major reasons behind remonetisation was to stop the unaccounted cash and convert the economy to a digital economy.

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