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LATEST NEWS UPDATES | Despite hype, demonetization missed all goals -Sneha Alexander & Vishnu Padmanabhan

Despite hype, demonetization missed all goals -Sneha Alexander & Vishnu Padmanabhan

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published Published on May 6, 2019   modified Modified on May 6, 2019
-Livemint.com

Note ban was the biggest move by the Narendra Modi-led govt, but it was also its most underwhelming initiative, judged by the economic impact it had

MUMBAI/ NEW DELHI:
Mumbai: Of all the initiatives of the National Democratic Alliance (NDA) government, none was as historic or dramatic as the decision to demonetize high-value currency notes. On 8 November 2016, in a televised address to the nation, Prime Minister Narendra Modi declared that all ?500 and ?1,000 notes, which together accounted for 86% of the currency in circulation, would no longer be legal tender. In India’s largely cash-based economy, this was a momentous decision.

Modi claimed that demonetization was needed to break the back of terrorism and corruption by eliminating black money from the system. “The magnitude of cash in circulation is directly linked to the level of corruption," said Modi in his speech on that fateful evening .

Three years on, none of these goals seem to have been met. Terrorism is as big a threat as it was three years ago, with the recent attacks in Gadchiroli and Pulwama continuing to expose our vulnerability to terror attacks.

Demonetization did bring down cash usage in the economy temporarily, but total currency in circulation has surpassed pre-demonetization levels. Even the cash-to-gross domestic product (GDP) ratio is inching back towards pre-demonetisation levels of 12%.

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Livemint.com, 5 May, 2019, https://www.livemint.com/news/india/despite-hype-demonetization-missed-all-goals-1557059532885.html


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