A Research Work

On
Impact of Demonetisation on Rural Sector with special
reference to Pune

At
Deccan Education Societys
Institute of Management Development and Research, Pune

Submitted by
Students of PGDM I
(Batch - 2016-18)

Submitted to
Chairman, LMC
Deccan Education Societys
Institute of Management Development and Research, Pune
(16th Jan. 2017)
Introduction
Honorable Prime Minister Shri. Narendra Modi (Government of India), on 8 November 2016
announced the demonetisation of all Rs.500 and Rs.1,000 banknotes as legal tender. The
reason behind this work was to sort out Corruption, Black Money and Terrorism. He asked
the general public to cooperate for 50 days (till 30th De. 2016) and deposit/exchange the
demonetized cash through the banks and post offices.

Majority of general public supported the decision and followed the timely guidelines
provided by the Govt. of India. Demonetising 86% of high value cash in the country was a
major challenge for the Government.

The Students of PGDM- I from DES IMDR, Pune, were interested to find out the impact of
this Demonetisation on Rural India. In order to conduct this research the Survey was
conducted in Rural area of Pune. The study covered 32 Villages in an around Pune which
included Attarwadi, Bahuli, Bhagatwadi, Challis Gaon, Daraoli, Donje, Gorhe Budruk,
Jatede, Kasaramboli, Katwadi, Khadakwasla, khamgaon, Khanapur, Kondur, Lavale, Madvi
Khrud, Malegaom, Mandavi, Mandavi Khurd, Mutha, Nasrapur, Parwadi, Paud, Pirangut,
Rajapur, Rautwadi, Salle, Saravli, Shindewadi, Urawade, Vaddmukhwadi, Wasadi.

Significance of the Study

The study majorly covers the rural population and tries to figure out the opinions, views
and feedback of rural population on demonetisation. The study also attempts to find out
the overall impact of demonetisation decision on Rural population.
The study clearly indicates the real impact of the decision and covers the real scenario of
the Rural Population.
Objectives of the Study
1. To understand the concept of Demonetisation.
2. To find out reasons behind the decision of demonetisation
3. To collect the opinions, views and feedback of rural population
4. To find out the overall impact of the demonetisation on Rural population.

Research Methodology
1. Research Design : Exploratory and Descriptive
2. Sample Size : 330
3. Sampling Technique : Simple Random Sampling
4. Sampling area : Rural Pune
5. Number of Village Covered : 32
6. Research Instrument : Structured Questionnaire
7. Number of Question : 26
8. Data Collection : Primary Data
9. Data Analysis Tool : MS -Excel
10. Data Analysis Techniques : Table, Cross Table, Pie-Chart
11. Research Time Frame : 1st January to 15th January 2017.
 Data Analysis and Presentation

Geographic Analysis
The study has covered 330 samples
from these villages which includes 64%
of Male and 36% female population.
We majorly tried to cover the Farmers
(34%), Small Traders (30%),
Labourers (13%) and Housewife
(23%).
Out of these, it is found that 82% of
respondents do have a bank account.
Those who ere not having bank
account (18%) majority were
Housewife (38%) followed by
Labourers (22%).

Support to the Decision

59 % of respondents were supporting the
government decision and 14% were saying
that they dont support the government
while others (27%) seemed to be confused
with it.
Majority of respondents 61% were saying
that the Demonetisation decision was right
decision taken at right time and Good
number of respondents (23%) think that
though the decision is right the time of
implementation was wrong while the other
(5%) think that it is just a political Drama
 Cash in hand
It is found that majority of Respondents
(36%) were holding more than
Rs. 5000/- in their house, out of which
74% are Farmers and Small Traders.
The reason given was to keep cash in
hand to complete their day to day
transactions.
Near about 30% of Respondents were
holding less than Rs.2000/- cash in
hand.
It was also found that 67% of
respondents deposited the cash (91% in
banks) immediately within 10 days of
the announcement wherein they (82%)
found the banks and Post office
employees overall behaviour was co-
operative.

Cash Availability in ATM Household Income and Cash withdrawal

This was the pain point identified in
this research. Half (50%) of
respondents stated that sufficient
money was not available in ATM
followed by 38% Respondents saying
they found it sometime. Very small
(12%) of respondents got money from
ATM whenever they visited it.
It was found that of respondents (65%) have
noted their income Rs.2000/- to Rs.10000/-
But they (51%) could withdraw less than
Rs.5000/- from Banks (75%) and ATM
(21%)
 Currency Used in Transaction
This could be the major finding of the research
that only 12% of respondents used the
Demonetized currency in their daily
transaction which means the Decision has not
impacted so much on the Rural area where in
Majority (88%) transactions happens in the
currency lower that Rs.500/-
One major thing was noted, though the
announcement was done on 8th Nov. 2016, the
Demonetized currency was still accepted
(31% of Small traders) at the Rural India and
45% of transactions were done by such
currency.

Digital India
In order to do the reality checks few questions
were asked on Digital India and it is observed that
the Government has failed to reach these Rural
areas in context to Digital India and Cash less
Economy
The negative response was noted by majority of
respondents, 71% respondents did not know what
Digital Transaction is and 75% about Cash less
Economy, 67% of respondents were not having
Smart Phone and Internet Connection (71%) and
those who had the Internet connection were using
mobile as a Source (90%).
Only 22% of respondents doing digital
transactions and majority of them (75%) are
using debit cards.
None (0%) of the Small Traders was accepting
payment through digital payments.
 Income Expense Analysis
It is observed that the half (50%) of the
respondents Income has decreased and
half noted the stability in the Income.
Wherein Expenses also shown the same
results.
This is also noted that the prices of daily
products were also stable (69%).

Perception of Rural area

Majority (53%) respondents noted that
this decision has been benefitted the
rich and has harassed the poor while
36% think that this is not the case.

Impact of Demonetisation
53% of respondents noted that this move will curb
corruption, black Money, Terrorism and other
social evil while 19% said it wont.
 Negative Remarks Positive Remarks
1. Less cash supply 1. Increased Awareness level about
2. Hospitals and schools didnt accept the Digital transactions
demonetized cash during specified period. 2. Will curb corruption, black Money,
3. No change of Rs.2000/- Terrorism and other social evil.
4. Long Queue
5. Business Decreased
6. Delay in payments
7. Business Decline

Suggestions
1. Introduction of Rs.1000/- note rather
than Rs.2000/- note
2. Stage-wise implementation
3. Educate first
4. Do this every decade
Major Findings
1. Awareness level.
The study has revealed that the rural population is aware of the decision since the
announcement of such decision. The population from rural Pune has accepted the
decision and has supported the decision by following the timely guidelines provided
to them.

2. Bank accounts.
The study shows that more than 80% of rural population have their bank account
and those who are not having (18%) the bank account are basically the housewives or
labourers.

3. Use of Currency Notes.

The research identified that the majority (88%) of transactions happens in the
currency notes bellow Rs.500/-. This indicates that the Rural population has no real
impact on their daily transaction.
One of the finding revealed that majority (36%) of farmers and traders were holding
more than Rs.5000/- cash in hand for their daily transactions.

4. Cash Deposit and Withdrawal.

It was found that 67% of population had deposited the demonetised cash within 10
days of the announcement and the majority (91%) deposited in the banks. At the
same time the rural population faced the major problem of availability of cash in
ATM. More than 50% population stated that there was no sufficient cash available in
ATM and those who had withdrawn the cash, they had directly visited the banks and
withdraw the cash.
5. Digital India.
The major finding of the study reinforces the challenge of making India digital. More
initiative by Government is needed to make the rural population a part of digital
India.
The study highlighted that more than 70% of rural population are not aware of
Digital Transactions and Cash less Economy. Though people had smart phones they
(68%) were not doing any digital transaction and those who were doing it were
primarily using the debit cards.

6. Income - Expense.
One of the research questions was inclined towards knowing the impact of the
decision on income and expenses. The result has revealed that this decision has
impacted both. It was observed that the half (50%) of the respondents Income had
decreased and the other half noted the stability in the Income. Wherein expenses also
showed the same results.

7. Perception of Rural Population.

Though the government has taken many corrective actions, the Rural population
(53%) still think that this decision has benefitted the rich and has harassed the poor
while 36% think that this is not the case.

8. Impact of Demonetisation Decision.

Though these 50 days of journey had ups and downs for every single individual and
Government as well, the rural population (53%) still thinks that this decision will
solve the government objective of eradicating corruption, black Money, Terrorism and
other social evils
Conclusion
The Research journey started with understanding of the concept of demonetisation
and analyzing the overall impact of demonetisation decision on Rural India with
special reference to Rural Pune. The students covered 32 villages across Pune and
collected the data from 330 respondents through structured questionnaire.

The study revealed that the decision has affected every single individual in the
country. The Rural population was also hit by the decision. The Rural population has
supported the decision and followed the timely guidelines given by the Government.

The research also reveled that the overall journey of 50 days was not easy for Public
and the Government. Government at one point also realised the hindrance in
implementing the decision and kept changing the rules accordingly.

The study indicated that majority of rural population was having bank accounts and
deposited the demonetised cash in banks. This decision has impacted the Income
and Expenses of the rural population.

The government needs to take more initiative in making India digital. Very few people
from Rural population are aware about the Digital Transaction, Cashless Economy
and are using debit card as the main source of their digital transactions. Though the
general rural populations think that the decision has harassed the poor and helped
the rich, it will definitely curb corruption, black Money, Terrorism and other social
evils in future. The study concluded by seeking open feedback from the rural
population and highlights the positives and the negatives of demonetisation with
some feasible suggestions to the Government of India.
 Questionnaire
Village Name_____________________________
Bank Name ______________________________ (if Not where? _____________________KM___)
Post Office Yes No (if Not where? _____________________KM___)
ATM/s Yes No (if Not where? _____________________KM___)

Name __________________________________________________________________________
Gender Male Female
Age Less than 18 18-25 25-35 35-50 More than 50
Occupation Famer Small Trader Labour Housewife Other_________
Bank a/c Yes No

Q.1. Do you agree with the Decision of Indian Government?

Fully Agree Partially Agree Totally Disagree

Q.2. What do you think about Demonetisation announced by Indian Government?

Appropriate Decision taken at right time Appropriate Decision taken at wrong time
Wrong Decision Political Drama / Stunt

Q.3. How much demonetized cash you had with you on 8th Nov. 2016? (in Rupees)
Less than 2000 2000-3000 3000-5000 More than 5000
Q.4. When did you deposit/ exchange it?
Within 10 days 10-20 day 20-30 days 30-50 days

Q.5. Where did you deposit/ exchange it?

Post office Banks Agents

Q.6. How was the behaviour of Post Office/ Banks Officials?

Co-operative Non-cooperative

Q.7. What is your Monthly household Expenses in rupees ?

Less than 2000 2000-50000 5000-10000 More than 10000

Q.8. How much cash you withdrew from you account during this period (8th Nov. to 31st Dec. 16)
Less than 5000 5000-7000 7000-10000 More than 10000

Q.9. From Where did you withdraw this money?

Banks ATM

Q.10. Was sufficient money Available at ATM?

Yes Sometime No

Q.11. Which Currency do you use maximum in your transaction?

Rs. 10 Rs.20 Rs. 50 Rs. 100 Rs. 500 Rs. 1000

Q.12. Have you seen the new currency notes?

Rs. 500 Yes No Rs. 2000 Yes No

Q.13. Did the transactions of banned Currency note stop since 9th Nov.?
Yes all transaction No, was continue Partial transactions

Q.14. Do you know what Digital Transaction is? Yes No

0
Q.15. Do you know what Cash Less Economy is? Yes No
Q.16. Do you have Smart Phone? Yes No
Q.17. Do you have Internet connection? Yes No

Q.18. What is the Source of Internet Connection?

Landline Leased Line wi-fi Mobile

Q.19. What happened after this Demonetisation decision by the Govt. ?

1. Your Income Increased Stable Decreased
2. Your Expenses Increased Stable Decreased
3. Prices of daily used product Increased Stable Decreased

Q.20. Do you do Digital transaction Yes No

Q.17(a). If Yes, How? Debit Card Credit Card Digital Wallet Net banking

Q.21. Do you think digital transaction is safe

Yes No Dont know

Q.22. Do you think Demonetisation has harassed the Poor people and benefited the Rich people
Yes No Dont know

Only for Farmers

Q. 1 How do you pay to your laborers In cash Cheque Digitally

Only Shop Keepers

Q.1. Were you accepting the old currency notes after the Demonetisation decision?
Yes No in emergency only Only from Known customer

Q.2.What happened to your Business volume?

Increased Stable Decreased

Q.3.Do you accept digital payment?

Yes No
If Yes, then how do you accept it
Digital Wallet Net banking POS (Swapping) Machines

Q.23. Do you think this move will curb Corruption, Black Money, Terrorism and other Social evil?
Yes Not at all Dont Know

Q.24. What Negative things you observed after this Decision of Demonetisation?
____________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________

Q.25. What Positive things you observed after this decision of Demonetisation?
____________________________________________________________________________________
____________________________________________________________________________________

Q.26. Would you like to give any suggestions to Government?

____________________________________________________________________________________
____________________________________________________________________________________
XXX--- Thank You ---XXX