Demonetization refers to withdrawal of a particular form of currency from circulation. It is necessary whenever there is a change of national currency; the old currency must be removing and substituted with the new currency unit. The currency was demonetizing first time in 1946, and second time in 1978. On 8th Nov. 2016 the currency is demonetized third time by present Modi Government. The disarray was created in every stratum of the society whether upper, middle or lower. Where some welcomed the move as it was seen for curbing black money, many are suffering by this movement. In this paper analyze the impact of demonetization on Indian economy and work out the probable consequences of the demonetization.