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Resource centre on India's rural distress
 
 

The Political Economy of Demonetising High Value Notes -Jayati Ghosh

-The Hindu Centre for Politics and Public Policy

The government’s high profile war on black money has generated mixed responses. However, both supporters and opponents of the 2016 demonetisation agree that the move has caused immense hardship to people, especially those outside the banking system and without alternative means to access goods and services in a largely cash economy. Jayati Ghosh, Professor of Economics, Jawaharlal Nehru University, discusses the conceptual, practical, and implementation issues arising from the November 8 announcement by Prime Minister Narendra Modi. A more effective way to flush out black money without disrupting normal economic activities, she says, would have been to announce a specific date for demonetisation of old notes followed up by an efficient tracking system.

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