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". The New York Times. 27 November 2016. 

• 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". Firstpost. 23 January 2017. 

• 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". The Times of India. 3 September 2017. 

• 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". Business Standard. 02 March 2021.