This paper has posited an endeavor to assess how the tool of Demonetization can be used to exterminate economical imbalances. Demonetization is one of the big steps initiated by Government of India in addressing the various issues like black money, counterfeit currency, corruption, terrorism etc. Lesson from historically demonetization guides us how to restructure the economical system of country by overcoming the earlier causes for failure. Demonetization brings various inconveniences to common people, it is imperative to evaluate the short run and medium term impacts on the economy. This paper elucidates the impact of such a move on the availability of credit, spending and lots of activity relating to the government finance system. Keywords- Demonetization, Indian economy, Black money, Parallel economy, Cashless transactions, Counterfeit currency, Corruption