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Resource centre on India's rural distress
 
 

Five years later, it’s even more clear that demonetisation was a disaster for India -Arun Kumar

-Scroll.in

The move brought about a policy-induced crisis for the country and did little to stop the flow of black money.

The demonetisation of high-denomination currency notes on November 8, 2016, created a nightmare for citizens that lasted several months. Long queues formed outside the banks and ATMs to obtain swap denotified currency notes for new ones so that life could continue. This situation persisted even beyond December 30, 2016, the last day for depositing old notes. Economic activity was severely dented for months. What the ruling party thought was a masterstroke turned out to be a disaster.

The sudden demonetisation was premised on the idea that “black means cash”. And, it is in high-denomination currency notes that black money would be held. So if the high-denomination notes were to be suddenly declared as illegal tender, then the black money of the rich would become null and void.

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