370 : Demonetisation of Indian Currency – An Assessment
Mr Vinod Rai
6 December 2016
The Government of India took the bold and unprecedented move to withdraw the legal tender
status of Rs 500 and Rs 1,000 notes on 8 November 2016. This move, designed to check the
accumulated stock of black money in the economy, has undeniably created a great deal of
hardship to the general public. While long queues form at bank branches and ATMs, the public
has generally accepted the hardship in the fulfilment of the larger objective stated by the
government. However, the nimble footedness of the government and the Reserve Bank are at
test to end the limits placed on the withdrawal of cash. The long term effects of the decision
are still to be assessed, but it is feared that in the short term the economy will certainly take a
hit. An attempt is made in this study to see how the move has unfolded and assess its
consequences for the economy.