The Political Economy of Demonetization: The Challenges and Prospectus for Informal Economy with Special Reference to Agriculture

Abstract

The climate of Indian politics was changed by the announcement of demonetization of higher value notes in order to curb corruption, black money circulation, terrorists funding, and counterfeiting of currency undertakings as it was justified by the Indian government. The gigantic tremor changed the way in which people transacted economically overnight. The Indian masses were stimulated to use paid cards such as RuPay, Debit/Credit Cards, etc., along with Internet banking, mobile banking instantaneously. The Indian agriculture, which is the largest informal economy carried out traditionally by direct operation was massively hit by new ways of digitalization of economic transaction. Thus, the motion has been set to analyze its political impact on government and politics on unorganized sector and economic impact on informal economy particularly on agriculture. The present paper in its first part tries to explore the background of political economy of demonetization. The second part tries to investigate the challenges faced by informal sector with special reference to workforce in agriculture, which is already facing intimidations from the forces of globalization through World Trade Organization (WTO) and its agreements. The final part explores the possibilities of its form and sustenance in the nearer future when India tries itself moving toward digitalization of its economy.