The research encompasses all impacts of demonetization in Indian economy. Primary emphasis is drawn upon the economic instability of India during the demonetization. It also shows how the key factors were affected during this critical phase. Core highlights of research are to check the volatility of GDP rate as well as the impact on finance sector in Indian economy. It is imperative to evaluate the short run and medium-term impacts that such a shock is expected to have on the economy. Further, the impact of such a move would vary depending on the extent to which the government decides to remonetize.