Demonetization is required whenever there is a change of national currency. The monetization process involves introducing a new currency or a coin in the same currency, or completely replacing the old currency with a new currency. There are many reasons why countries demonetize their own currency. Some reasons include combating inflation, combat corruption, and discouraging cash systems. The Demonetization was a huge step taken by the Government of India to curb the Black Money from the Nation. This was the third time in Indian history that the government insisted to demonetize the high denomination notes to attack black currency. The main goal of demonetization in 2016 was to stop the circulation of counterfeit notes in the economy, along with black money removal, stop corruption and funding for terrorist activities. The basic ideology of the policy was to create short-term impacts for long-term purposes and to curb corruption in the economy. The study attempts to understand implications and reasons of demonetization, the sector wise impact of demonetization and an insight into the positive and negative impact of demonetization on Indian economy. This study shows that demonetization had a shorter-term impact than the long-term, and generally failed to achieve its main goal.