2016 Indian banknote demonetisation

The 2016 Indian banknote demonetization was a policy decision by the Government of India on 8 November 2016 to withdraw all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series from circulation. The stated intention of the demonetization was to reduce the circulation of black money and counterfeit currency, to reduce the use of illicit and counterfeit cash to fund illegal activity and terrorism, and to encourage cashless transactions. Quotes Demonetization was ostensibly implemented to combat corruption, terrorism financing and inflation. But it was poorly designed, with scant attention paid to the laws of the market, and it is likely to fail. So far its effects have been disastrous for the middle- and lower-middle classes, as well as the poor. And the worst may be yet to come. Economist Kaushik Basu, as quoted in In India, Black Money Makes for Bad Policy 27 November 2016 The New York Times https://www.nytimes.com/2016/11/27/opinion/in-india-black-money-makes-for-bad-policy.html Even if RBI opposed demonetisation, the government would have gone ahead with it. The originally stated targets of note ban are fighting black money, fake currency and corruption. None of these is going to be solved out of the demonetisation exercise. Tell me how? Anytime you do this, it will hurt the common man only. Former RBI Deputy Governor K. C. Chakrabarty, as quoted in Exclusive: Talk of cashless economy ‘unreal’, agenda of MNCs, says former RBI dy gov KC Chakrabarty 23 January 2017 Firstpost https://www.business-standard.com/article/pti-stories/unemployment-high-in-india-due-to-govt-s-ill-considered-demonetisation-decision-manmohan-singh-121030200615_1.html Let us not mince words about it – GDP has suffered. The estimates I have seen range from 1 to 2 percentage points, and that’s a lot of money – over Rs 2 lakh crore and maybe approaching Rs 2.5 lakh crore. Then there are the other costs – the hassle cost of people standing in line, the printing cost that the RBI says is close to Rs 8,000 crore, the cost to the banks of withdrawing the money, and the time spent by their clerks, by their managers and by their senior officers doing all this, and the interest being paid on all those deposits, which earlier were effectively an interest-free loan to the RBI. Former RBI Governor Raghuram Rajan, as quoted in I left because there was no offer on the table from the govt: Raghuram Rajan 3 September 2017 The Times of India https://timesofindia.indiatimes.com/business/india-business/i-left-because-there-was-no-offer-on-the-table-from-the-govt-raghuram-rajan/articleshow/60341824.cms Unemployment is high and the informal sector is in shambles, a crisis precipitated by the ill considered demonetisation decision taken in 2016. Economist and former Indian PM Manmohan Singh, as quoted in High unemployment due to 'ill considered demonetisation': Manmohan Singh 02 March 2021 Business Standard https://www.business-standard.com/article/pti-stories/unemployment-high-in-india-due-to-govt-s-ill-considered-demonetisation-decision-manmohan-singh-121030200615_1.html External links Category:2016 in Asia