THE COERCIVE “SPIRALS” OF POLICY-DRIVEN LIQUIDITY CRUNCH ON SMALL INFORMAL BUSINESSES IN SUB-URBAN KOLKATA

Abstract

The purpose of the present paper is to detect the immediate effects of the policy of demonetization (2016) in India on small informal businesses in sub-urban periphery adjacent to the formal “core”. The study has attempted to detect the influences of demonetization causing severe liquidity crunch faced by the peripheral informal businesses which require liquid cash for their day-to-day transactions. The study has also focused on the instance of suddenly driven coercive “spirals” of the counterfeit of supply of liquid cash in the market, if any, and the recurring problems faced by them after the event. The selection of the sample region is on the basis of its peripheral informal proximity allowing formal-informal linkages in production, employment and exchanges with the “core”.