Sentiment analysis and changes in economic activity due to demonetization

Abstract

On November 8, 2016, the Government of India announced that the existing?500 and ?1000 denomination notes would cease to exist as legal tender. The stated objective was to curb circulation of black money and counterfeit notes in the economy. Parallelly, the government is working towards a digital economy leading to transparency and better financial inclusion. But this move has so far received mixed response from both the public and experts in the country. Our study has three main modules. First, we would be analyzing sentiments of people including their immediate knee-jerk reaction and their reaction in the long run once the effects of demonetization have stabilized. Second, given the government’s push towards a digital economy, we would see if demonetization has helped in this endeavor. Finally, we would be looking at how this move has affected the economic activity of the country by analyzing the financial performance of top listed companies as a proxy.