• Saraswathi S
• Nethravathi N
• Varalakshmi B

Demonetization is a tool of Government to eliminate the currency. It is a process by which a series of currency will not be legal tender. On 8th November 2016, Government of India had announced that rupees 500 and 1000 rupee note will not be a legal tender. As a result of the withdrawal of Rs 500 and Rs 1000 notes, there occurred huge gap in the currency composition as after Rs 100; Rs 2000 is the only denomination. Absence of intermediate denominations like Rs 500 and Rs 1000 will reduce the utility of Rs 2000. Effectively, this will make Rs 2000 less useful as a transaction currency though it can be a store value denomination. The goal of demonetization move in India is to make the economy stronger and eliminate the parallel cash economy which is unaccounted and untaxed. According to the statistics available from the Reserve Bank of India, 87% transactions in India are cash transactions and this loophole is used by corrupted people to build a parallel economy with unaccounted money. This parallel economy helps in terror financing which in turn hampers the growth and development of country. Demonetization is the legal process of devaluing a piece of currency or changing the value of a particular denomination of currency to nil. However, demonetization plan made country’s citizens face lot of pain due to those long lines in the queues, hurdles in everyday life, constraints in the finance; especially those employed find it difficult to exchange currencies. The demonetization process affects all levels of people and their lives including farmers, middle and low class people, retailers, wholesalers and Small scale industries etc., Though the process of demonetization laid down impact on business activity for small traders but the sentiments for government’s move of demonetization was welcomed by small traders and they adopted as new technology in payment mode by accepting more plastic money and virtual wallet. A systematic review of literature was conducted by using an archival method. The study is executed on the basis of primary data. The data will be collected from 100 respondents from T.Narasipura taluk , Mysuru district & Kollegal taluk, Chamarajanagar district using convenient sampling. The main objective of this study is to find out various issues and challenges faced by merchant due to the demonetization in their business activity and customer response in having cashless transaction with the traders. The major findings reveal that due to the cashless transactions there is a difference in business before and after demonetization. On the basis of consumer segments has beard some loss of business but indicated that they were moving towards adoption of new technology. The concept of demonetization came into effect for the goodness of India, but it failed to find its purpose rightly. In sharp contrast, the others believe it is a purely misleading, decision, based on no or poor understanding of black economy.

Demonetization, retailers, wholesalers, transaction, consumer

"“A STUDY ON IMPACT OF DEMONETIZATION ON MERCHANT’S – ISSUES & CHALLENGES”", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.5, Issue 10, page no.120-129, October-2018, Available :http://www.jetir.org/papers/JETIRG006016.pdf

"“A STUDY ON IMPACT OF DEMONETIZATION ON MERCHANT’S – ISSUES & CHALLENGES”", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.5, Issue 10, page no. pp120-129, October-2018, Available at : http://www.jetir.org/papers/JETIRG006016.pdf