View source for Finance:2016 Indian banknote demonetisation

{{Short description|Demonetisation of Indian banknotes}}
{{Use Indian English|date=December 2016}}
{{Infobox News event
|image=Queue at Bank to Exchange INR 500 and 1000 Notes - Salt Lake City - Kolkata 2016-11-10 02103.jpg
|caption=Queues outside a bank to exchange demonetised banknotes in [[Place:Kolkata|Kolkata]] on 10 November 2016
|date={{Start date and age|2016|11|08|df=yes|p=yes}}
|time=20:15 IST (14:45 UTC)
}}
{{Narendra Modi}}<!-- this section is transcluded on Premiership of Narendra Modi --> <section begin="Lead"/> 
On 8 
November 2016, the Government of India announced the [[Finance:Legal tender#Demonetization|demonetisation]] of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series. It also announced the issuance of new ₹500 and ₹2,000 banknotes in exchange for the demonetised banknotes.<ref name="withdrawaloflegal">{{cite web|url=https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=38520|title=Withdrawal of Legal Tender Status for ₹ 500 and ₹ 1000 Notes: RBI Notice (Revised)|date=9 November 2016|publisher=Reserve Bank of India|access-date=9 November 2016}}</ref> Prime Minister Narendra Modi claimed that the action would curtail the shadow economy, increase cashless transactions and reduce the use of illicit and counterfeit cash to fund illegal activity and terrorism.<ref>{{cite news|url=https://www.thehindu.com/news/national/Modi-urges-country-to-become-a-cashless-society/article16710453.ece|title=Modi urges country to become a cashless society|date=27 November 2016|work = The Hindu}}</ref><ref name="India Today2">{{cite web|url=http://indiatoday.intoday.in/story/live-pm-narendra-modi-addresses-nation/1/805755.html|title=Here is what PM Modi said about the new Rs 500, Rs 2000 notes and black money|date=8 November 2016|access-date=9 November 2016|work=India Today}}</ref><ref>{{cite web|url=http://timesofindia.indiatimes.com/india/Rs-500-and-Rs-100-notes-pulled-out-of-circulation-immediately-PM-Narendra-Modi/articleshow/55315473.cms|title=Notes out of circulation|date=8 November 2016|work=The Times of India}}</ref>

The announcement of demonetisation was followed by prolonged cash shortages in the weeks that followed, which created significant disruption throughout the economy.<ref>{{Cite news|url=http://economictimes.indiatimes.com/markets/stocks/news/demonetisation-to-drag-india-behind-china-in-gdp-growth-rob-fastest-growing-economy-tag/articleshow/55492970.cms|title=Demonetisation may drag India behind China in GDP growth, rob fastest-growing economy tag|last=Saikia|first=Bijoy Sankar|date=18 November 2016|newspaper=The Economic Times|access-date=5 January 2017}}</ref><ref>{{cite news|url=https://www.economist.com/news/finance-and-economics/21711035-withdrawing-86-value-cash-circulation-india-was-bad-idea-badly|title=The dire consequences of India's demonetisation initiative|date=3 December 2016|newspaper=The Economist|access-date=5 January 2017}}</ref><ref>{{Cite news|url=http://english.manoramaonline.com/in-depth/demonetization-india-anniversary.html|title=Demonetization Announcement Anniversary 2017 {{!}} Onmanorama|work=OnManorama|access-date=7 November 2017}}</ref> People seeking to exchange their banknotes had to stand in lengthy queues, and several deaths were linked to the rush to exchange cash.<ref name="Aljazeera-1" /><ref name="death-ref1">{{cite web|url=http://www.huffingtonpost.in/2016/11/15/demonetisation-death-toll-rises-to-25-and-its-only-been-6-days/|title=Demonetisation Death Toll Rises To 25 And It's Only Been 6 Days|work=huffingtonpost|access-date=15 November 2016|archive-url=https://web.archive.org/web/20161116020908/http://www.huffingtonpost.in/2016/11/15/demonetisation-death-toll-rises-to-25-and-its-only-been-6-days/|archive-date=16 November 2016|url-status=dead}}</ref>

According to a 2018 report from the Reserve Bank of India ₹15.3 [[Lakh|lakh]] [[Crore|crore]] (15.3 trillion rupees on the [[Long and short scales|short scale]]) of the ₹15.41 lakh crore in demonetised bank notes, or approximately 99.3%, were deposited in banks, leading analysts to state that the effort had failed to remove [[Finance:Indian black money|black money]] from the economy.<ref name=FTdemonetisationFail /><ref name=BBCdemonetisationFail /> The BSE SENSEX and NIFTY 50 stock indices fell over 6% on the day after the announcement.<ref name="stockcrash9nov" /> The move reduced the country's [[Finance:Industrial production|industrial production]] and its [[Finance:Gross domestic product|GDP]] growth rate.<ref>{{Cite web|url=https://www.indiatoday.in/education-today/gk-current-affairs/story/demonetization-gst-slowed-down-gdp-growth-of-india-1123939-2018-01-06|title=Thanks to Demonetisation and GST, India's GDP growth hit a 4-year low at 6.5 per cent|website=India Today|language=en|access-date=2 October 2018}}</ref> It is estimated that 1.5 million jobs were lost.<ref name="theguardian.com">{{Cite web|date=2018-08-30|title=Demonetisation drive that cost India 1.5m jobs fails to uncover 'black money'|url=http://www.theguardian.com/world/2018/aug/30/india-demonetisation-drive-fails-uncover-black-money|access-date=2021-07-31|website=the Guardian|language=en}}</ref> The move also saw a significant increase in digital and cashless transactions throughout the country.<ref>{{cite web|url=https://www.koreascience.or.kr/article/JAKO202109554061272.view?orgId=kodisa|title=Moving from Cash to Cashless Economy: Toward Digital India|publisher=Korea Distribution Science Association}}</ref>

Initially, the move received support from some central bankers as well as from some international commentators. The move was also criticised as poorly planned and unfair, and was met with protests, litigation, and strikes against the government in several places across India. Debates also took place concerning the move in both houses of Parliament.<ref>{{cite web|url=http://indiatoday.intoday.in/story/parliament-live-congress-pm-modi-raincoat-dr-manmohan-singh-opposition/1/878509.html |title=Demonetisation debate in Parliament: Disaster, says Chidambaram; high cash economy corrupt, counters Jaitley : India, News – India Today |publisher=Indiatoday.intoday.in |date=9 February 2017 |access-date=26 June 2017}}</ref><ref>{{cite web|url=http://indianexpress.com/article/india/india-news-india/demonetisation-oppostion-parties-countrywide-protest-bandh-call-november-28-4391208/|title=Demonetisation: Opposition calls for countrywide protest on November 28|publisher=The Indian Express|access-date=23 November 2016|date=23 November 2016}}</ref><ref>{{cite news|url=http://economictimes.indiatimes.com/news/economy/policy/demonetisation-protest-sure-to-succeed-with-peoples-support/articleshow/55607966.cms|title='Demonetisation protest sure to succeed with people's support'|newspaper=The Economic Times|access-date=24 November 2016|date=24 November 2016}}</ref><section end="Lead"/>

The consensus is that demonetisation was not the right move to target black money, and was unsuccessful.<ref name="decoded" /><ref>{{cite book |last1=Kumar |first1=Arun |title=Demonetization and Black Economy |date=20 December 2017 |publisher=Penguin Random House India Private Limited |isbn=978-93-87326-41-5 |url=https://books.google.com/books?id=vs5SDwAAQBAJ |access-date=24 October 2023 |language=en}}</ref> Moreover, it was based on an incorrect understanding of what constitutes black money.<ref>{{cite book |last1=Ramakumar |first1=R. |title=Note-Bandi: Demonetisation and India’s Elusive Chase for Black Money |date=16 February 2018 |publisher=Oxford University Press |isbn=978-0-19-909272-7 |url=https://books.google.com/books?id=T59MDwAAQBAJ |access-date=24 October 2023 |language=en}}</ref>

==Background==
The Indian government had demonetised banknotes on two prior occasions—once in 1946 and once in 1978—and in both cases, the goal was to combat tax evasion via "[[Finance:Indian black money|black money]]" held outside the formal economic system.<ref name=IE2016>{{cite news |title=Demonetisation: Three times India faced the big move |url=https://indianexpress.com/article/india/india-news-india/demonetisation-narendra-modi-currency-ban-rs-500-rs-1000-1946-1978-4381683/ |access-date=18 October 2018 |work=The Indian Express |date=16 November 2018}}</ref> In 1978, the Janata Party coalition government demonetised banknotes of {{₹|1000}}, {{₹|5000}} and {{₹|10000}}, again in the hopes of curbing counterfeit money and black money.<ref>{{cite web | url=http://www.livemint.com/Politics/uzZItqeHdMPHHgFJaq2BnM/A-history-of-demonetization-in-India.html | title=Rs 500, Rs 1000 notes may be back, if history is a guide | work=Live Mint | date=9 November 2016 | access-date=9 November 2016 | author=Gopika Gopakumar, Vishwanath Nair}}</ref>

In 2012, the Central Board of Direct Taxes recommended against demonetisation, saying in a report that "demonetisation may not be a solution for tackling black money or shadow economy, which is largely held in the form of benami properties, bullion and jewelry."<ref>{{cite web|url=http://indianexpress.com/article/business/banking-and-finance/demonetisation-black-money-corruption-banks-atms-modi-finance-ministry4375205/|title=At least 4 months needed to replace demonetised notes, not 50 days: Here's why|date=14 November 2016|work=The Indian Express}}</ref><ref>{{cite web|url=https://dor.gov.in/sites/default/files/Measures_Tackle_BlackMoney.pdf|title=Measures to Tackle Black Money in India and Abroad}}</ref> According to data from income tax probes, black money holders kept only 6% or less of their wealth as cash, suggesting that targeting this cash would not be a successful strategy.<ref>{{cite web|url=http://www.hindustantimes.com/india-news/cash-has-only-6-share-in-black-money-seizures-reveals-income-tax-data/story-JfFuTiJYtxKwJQhz2ApxlL.html |title=Why govt's demonetisation move may fail to win the war against black money |work=Hindustan Times |date=12 November 2016 |access-date=12 November 2016 |author=Appu Esthose Suresh}}</ref>

== Demonetisation process ==
{{multiple image
 | width =
 | direction = vertical
 | image1=India 500 INR, MG series, 2014, obverse.jpg | alt1=INR 500 banknote
 | image2=India 1000 INR, MG series, 2006, obverse.jpg | alt2=INR 1000 banknote
 | footer = Demonetised {{₹|500}} and {{₹|1000}} banknotes of the Mahatma Gandhi Series
}}

===Preparation and announcement===
The plan to demonetise the {{₹|500}} and {{₹|1000}} banknotes was initiated between six and ten months before it was a report by the State Bank of India (SBI) analysed possible strategies and effects of demonetisation.<ref>{{cite web|url=http://timesofindia.indiatimes.com/business/india-business/Rs-500-Rs-1000-note-rumours-not-polls-behind-cash-surge-SBI/articleshow/51736091.cms |title=Rs 500, Rs 1,000 note rumours, not polls, behind cash surge: SBI |work=The Times of India |date=8 April 2016 |access-date=12 November 2016}}</ref> In May 2016, the Reserve Bank of India had started preparing for new banknotes and confirmed the design of {{₹|2000}} banknotes in August 2016. The printing of new banknotes started in October when the news stories of forthcoming new banknotes appeared in the media.<ref name="cnbchistory">{{cite web | url=https://www.cnbc.com/2016/12/08/india-demonetization-news-modis-black-money-move-kept-a-closely-guarded-secret.html | title=India demonetization news: Modi's black money move kept a closely guarded secret| website={{wipe|CNBC}}| date=9 December 2016}}</ref><ref>{{Cite news|url=http://www.business-standard.com/article/economy-policy/demonetisation-in-the-works-for-6-months-10-people-in-the-loop-including-raghuram-rajan-116111000009_1.html|title=Demonetisation: In the works for 6 months, 10 people in the loop, including Raghuram Rajan|last=Roychoudhury|first=Arup|date=10 November 2016|newspaper=Business Standard India|access-date=23 January 2017}}</ref><ref>{{Cite news|url=http://www.thehindu.com/news/national/demonetisation-of-rs-500-1000-notes-move-was-in-the-pipeline-for-months/article9321244.ece|title=Move was in the pipeline for months|date=9 November 2016|newspaper=The Hindu|access-date=9 November 2016}}</ref> On 27 October 2016, the [[Social:Hindi|Hindi]] daily ''Dainik Jagran'' published a report quoting RBI sources speaking of the forthcoming of {{₹|2000}} banknotes alongside withdrawal of {{₹|500}} and {{₹|1000}} banknotes.<ref>{{cite web|url=http://epaper.jagran.com/epaper/27-oct-2016-16-lucknow-archive-edition-ayodhya-Page-18.html%23 |title=ePaper link from Hindi daily Dainik Jagran of 27th October 2016 |work=Dainik Jagran Epaper |access-date=23 November 2016 |url-status=bot: unknown |archive-url=https://web.archive.org/web/20161123183146/http://epaper.jagran.com/epaper/27-oct-2016-16-lucknow-archive-edition-ayodhya-Page-18.html%23 |archive-date=23 November 2016 }}</ref><ref>{{cite web|url=http://www.hindustantimes.com/india-news/journalist-broke-story-about-currency-demonetisation-a-fortnight-back/story-3OpgtR5ehdzkRRrwQITLgK.html |title=Journalist broke story about currency demonetisation a fortnight back |work=Hindustan Times |access-date=12 November 2016|date=11 November 2016 }}</ref> On 21 October 2016, ''The Hindu Business Line'' had also published a report on the forthcoming {{₹|2000}} banknote.<ref>{{cite web|url=http://www.thehindubusinessline.com/money-and-banking/coming-soon-to-your-wallet-2000-notes/article9252371.ece |archive-url=https://web.archive.org/web/20170225034010/http://www.thehindubusinessline.com/money-and-banking/coming-soon-to-your-wallet-2000-notes/article9252371.ece |url-status=dead |archive-date=25 February 2017 |title=The Hindu business line article about coming 2000 Rupee note and possible withdrawal of 500 and 1000 rupee notes}}</ref>

The Board of the Reserve Bank of India met on Nov 8th, 2016, 5:30 PM to consider a letter from the Ministry of Finance regarding demonetization. "Two key reasons for the proposal cited in the government letter were:
(1) between 2011 and 2016, the supply of 500- and 1,000-rupee bills had grown by 76
and 108 percent, respectively, while India's economy had only grown by 30 percent
during this period; and (2) cash typically facilitated "black money." The board was
further told that the measure was also intended to encourage greater financial
inclusion and to incentivize greater digitization of the economy. The board approved the proposal, but not before making a few trenchant comments. It noted that the measure may not have the desired effect on black
money because most people do not hold undeclared wealth in cash. It further
worried about the negative effects on growth that were likely to occur in the short
run. Possibly the most damning observation was that the primary fact on which the
government had based its proposal—that the supply of 500- and 1,000-rupee bills
had far outstripped the growth rate of the economy—was simply wrong. The board
pointed out the embarrassing fact that the government had compared GDP growth
in real terms with the growth of currency supply in nominal terms. In fact, nominal
GDP growth had summed to over 80 percent between 2011 and 2016 and hence was
in line with the growth of the currency bills to be demonetized."<ref name="Lahiri 63, 55–74">{{Cite journal|last=Lahiri|first=Amartya|date=2020-02-01|title=The Great Indian Demonetization|journal=Journal of Economic Perspectives|volume=34|issue=1|pages=63, 55–74|doi=10.1257/jep.34.1.55|issn=0895-3309|doi-access=free}}</ref><ref>{{cite web |last1=Patel |first1=Urjit R |title=The Minutes of the 561st meeting of the Central Board of Directors of the Reserve Bank of India |url=http://www.humanrightsinitiative.org/download/DeMon%201stattachment.pdf |website=humanrightsinitiative.org |access-date=31 December 2021}}</ref><ref>{{cite news |last1=ENS Economic Bureau |title=Govt, RBI discussed note ban for six months; Directors warned against short-term negative effect |url=https://indianexpress.com/article/business/govt-rbi-discussed-note-ban-for-six-months-directors-warned-against-short-term-negative-effect-5621665/ |access-date=31 December 2021 |agency=Indian Express |date=March 12, 2019}}</ref>

The Union cabinet was apprised of the plan on 8 November 2016 in a meeting in the evening convened by Prime Minister Modi.<ref>{{Cite news | url=https://economictimes.indiatimes.com/news/politics-and-nation/one-year-of-note-ban-the-ultra-secret-move-that-no-one-came-to-know-for-several-months/articleshow/61528334.cms | title=One year of note ban: The ultra-secret move that no one came to know for several months| newspaper=The Economic Times| date=7 November 2017| last1=Sinha| first1=Smita}}</ref> Soon after the meeting, Modi announced the demonetisation in an unscheduled live national televised address at 20:15 [[Indian Standard Time|IST]].<ref name="auto">{{cite news|url=http://www.ndtv.com/india-news/pm-modi-speaks-to-nation-tonight-at-8-pm-1622948|title=Watch PM Modi's Entire Speech on Discontinuing 500, 1000 Rupee Notes|date=8 November 2016|publisher=NDTV India|last1=Bhatt|first1=Abhinav|access-date=8 November 2016}}</ref><ref name="auto1">{{Cite news|url=http://www.thehindu.com/news/national/live-narendra-modis-address-to-nation/article9320548.ece|title=Demonetisation of Rs. 500 and Rs. 1000 notes: RBI explains|date=8 November 2016|newspaper=The Hindu|access-date=10 November 2016}}</ref> He declared circulation of all {{₹|500}} and {{₹|1000}} banknotes of the Mahatma Gandhi Series as invalid effective from the midnight of the same day, and announced the issuance of new {{₹|500}} and {{₹|2000}} banknotes of the Mahatma Gandhi New Series in exchange for the demonetised banknotes.<ref>{{cite web|url=http://www.firstpost.com/business/demonetisation-anniversary-a-year-later-heres-what-prime-minister-narendra-modi-had-said-on-8-november-2016-4198753.html|title=Demonetisation anniversary: Full text of Prime Minister Narendra Modi's speech from 8 November, 2016 – Firstpost|website=First Post|date=8 November 2017|access-date=26 February 2018}}</ref>

===Information leak rumours===
In an interview of prominent businessmen 'allegedly' claimed after the announcement of demonetisation that they had received prior tip-offs and rumours warning of the move and after seeing leaked photos of new {{₹|2000}} notes "knew what was coming", allowing them to preserve their money by converting it into smaller denominations.<ref>{{cite web|first=Aman|last=Sethi|url=https://www.thequint.com/business/2016/11/11/before-pms-announcement-rumours-of-demonetisation-abounded |title=Before PM's Announcement, Rumours of Demonetisation Abounded |publisher=The Quint |date=6 November 2016 |access-date=12 November 2016}}</ref> A BJP MLA from Rajasthan, Bhawani Singh Rajawat, casually claimed in a video that wealthy businessmen were informed about the demonetisation before it occurred. He later denied making the comments.<ref>{{cite web|url=http://www.financialexpress.com/india-news/demonetisation-ambani-adani-were-informed-and-thus-made-arrangements-says-bjp-mla/447944/|title=Demonetisation: Ambani, Adani were informed and thus made arrangements, says BJP MLA|date=17 November 2016|access-date=24 November 2016}}</ref><ref>{{cite web|url=http://www.newindianexpress.com/nation/2016/nov/17/adanis-ambanis-already-knew-about-currency-ban-bjp-mla-caught-on-camera-1539642.html|title=Adanis, Ambanis already knew about currency ban: BJP MLA caught on camera|access-date=24 November 2016}}</ref>

===Cash exchange and withdrawal===
[[File:2016 Indian currency note demonetisation.jpg|thumb|People gathered at an ATM of Axis Bank on 16 November 2016 in Mehsana, Gujarat to withdraw cash following deposit of demonetised banknotes in bank.]]

The Reserve Bank of India stipulated that the demonetised banknotes could be deposited with banks over a period of fifty days until 30 December 2016. The banknotes could also be exchanged for legal tender over the counter at all banks. The limit for such exchange was {{₹|4000}} per person from 8 to 13 November, was increased to {{₹|4500}} from 14 to 17 November, and reduced to {{₹|2000}} from 18 to 25 November.<ref name="revisedguidelines" /><ref name="rbirevision" /><ref name=":1">{{cite web|url=http://finmin.nic.in/press_room/2016/Govt_decisions_on_oldNotes17112016.pdf|title=17 November Government press release|website=Ministry of Finance, Government of India|access-date=17 November 2016|archive-url=https://web.archive.org/web/20161117213433/http://finmin.nic.in/press_room/2016/Govt_decisions_on_oldNotes17112016.pdf|archive-date=17 November 2016|url-status=dead}}</ref> The exchange of banknotes was stopped completely on 25 November, although the government had previously stated that the volume of exchange would be increased after that date.<ref>{{cite web|url=http://indianexpress.com/article/india/india-news-india/pm-modi-said-exchange-limit-to-be-hiked-after-november-24-exchange-stopped-4393985/|title=All note exchange stopped from today, PM Modi goes back on promise of hike after November 24|date=25 November 2016}}</ref> International airports also facilitated an exchange of banknotes for foreign tourists and out-bound travellers, amounting to a total value of {{₹|5000}} per person.<ref>{{Cite news|url=http://economictimes.indiatimes.com/news/economy/policy/outlets-that-will-accept-rs-1000-and-rs-500-notes-in-next-72-hours/articleshow/55317768.cms|title=Outlets that will accept Rs 1,000 and Rs 500 notes in next 72 hours|date=8 November 2016|newspaper=The Economic Times|access-date=9 November 2016}}</ref> Fuel pumps, government hospitals, railway and airline booking counters, state-government recognised dairies and ration stores, and crematoriums were allowed to accept the demonetised banknotes until 2 December 2016.<ref>{{cite web|url=http://finmin.nic.in/press_room/2016/press_note_01122016.pdf|title=With effect from the midnight of 2nd December, 2016, old Rs. 500 bank notes will not be accepted at petrol, diesel and gas outlets of Public Sector Oil and Gas Marketing Companies as well as for purchase of Air Tickets at Airports; However, supply of LPG continues to be in the exempted category for the purpose of payment through old Rs. 500 bank notes.|date=1 December 2016|website=Ministry of Finance, Government of India|access-date=11 January 2017}}</ref>

Cash withdrawals from bank accounts were restricted to ₹10,000 per day and {{₹|20000}} per week per account from 10 to 13 November.<ref name="withdrawaloflegal"/> This limit was increased to {{₹|24000}} per week from 14 November 2016.<ref name="revisedguidelines">{{cite web|url=http://finmin.nic.in/press_room/2016/MoF_reviewed_availability_distribution_Notes.pdf|title=Finance Ministry has reviewed the position regarding availability and distribution of all denominations of bank notes|publisher=Ministry of Finance, Government of India|access-date=13 November 2016|archive-url=https://web.archive.org/web/20161114012438/http://finmin.nic.in/press_room/2016/MoF_reviewed_availability_distribution_Notes.pdf|archive-date=14 November 2016|url-status=dead}}</ref><ref name="rbirevision">{{cite web|url=https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10706&Mode=0|title=Withdrawal of Legal Tender Character of existing ₹ 500/- and ₹ 1000/- Bank Notes – Revision in limits|publisher=Reserve Bank of India |access-date=17 March 2017}}</ref> Limits on cash withdrawals from Current accounts/ Cash credit accounts/ Overdraft accounts were withdrawn later. RBI increased the withdrawal limit from Savings Bank account to {{₹|50000}} from the earlier {{₹|24000}} on 20 February 2017 and then on 13 March 2017, it removed all withdrawal limits from savings bank accounts.<ref name="FE1">{{Cite news|url=http://www.financialexpress.com/india-news/rbi-removes-limit-on-cash-withdrawal-banks-go-back-to-pre-demonetisation-era/586375/|title=RBI removes limit on cash withdrawal, banks go back to pre-demonetisation era|date=13 March 2017|work=The Financial Express|access-date=26 May 2017|language=en-US}}</ref>

A daily limit on withdrawals from ATMs was also imposed varying from {{₹|2000}} per day until 14 November,<ref name="ATMsnotdispensing">{{cite web|title=ATMs –Non-dispensing of Old High Denomination Notes – Closure of operations|url=https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10683&Mode=0|publisher=Reserve Bank of India|access-date=8 November 2016|date=8 November 2016}}</ref> and {{₹|2500}} per day until 31 December.<ref name="revisedguidelines" /><ref name="rbirevision" /> This limit was increased to {{₹|4500}} per day from 1 January,<ref>{{cite web|url=https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=10807&Mode=0|date=30 December 2016|publisher=Reserve Bank of India|title=Cash withdrawal from ATMs – Enhancement of daily limits |access-date=17 March 2017}}</ref> and again to {{₹|10000}} from 16 January 2017.<ref name="FE1"/> From 17 November, families were allowed to withdraw {{₹|250000}} for wedding expenses. Farmers were permitted to withdraw {{₹|25000}} per week against crop loans.<ref name=":1" /><ref>{{cite web|url=http://indiatoday.intoday.in/story/demonetisation-weddings-shaktikanta-das-government-economic-affairs-secretary/1/812730.html|title=Demonetisation rule modified, families can withdraw Rs 2.5 lakh for weddings from one a count|work=India Today|date=17 November 2016|access-date=17 November 2016}}</ref>

=== Ordinance and Acts ===
The Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 was issued on 28 December 2016, ending the liability of the government for the demonetised banknotes. The ordinance also imposed fines on people found carrying out transactions with them after 8 November 2016, or holding more than ten of them after 30 December 2016. It provided for the exchange of the banknotes after 30 December for people who had been outside India between 9 November and 30 December.<ref>{{cite web|title=The Specified Banknotes Ordinance, 2016|url=http://dea.gov.in/sites/default/files/Ordinance%2010%20of%202016%2030.12.2016.pdf}}</ref><ref>{{Cite news|url=http://www.hindustantimes.com/india-news/cabinet-clears-ordinance-to-punish-people-holding-banned-notes-beyond-deadline/story-QwwN1lGHU9NuhJP2ntalmM.html|title=Cabinet clears ordinance to punish people holding banned notes beyond deadline|date=28 December 2016|newspaper=hindustantimes.com/|access-date=10 January 2017}}</ref> The Specified Bank Notes (Cessation of Liabilities) Act, 2017 was notified on 1 March 2017, replacing the ordinance.<ref>{{cite news|url=https://www.livemint.com/Politics/0uUjg2IQGUnIAxQNRokFVK/Govt-notifies-law-to-make-possession-of-old-Rs500-Rs1000-no.html|title=Govt notifies law to make possession of old Rs500, Rs1000 notes punishable|work=Live Mint|date=1 March 2017|access-date=18 October 2018}}</ref>

==Objectives and outcomes==
The government said that the main objective of the exercise was curbing [[Finance:Indian black money|black money]], which included income which had not been reported and thus was untaxed; money gained through corruption, illegal goods sales and illegal activities such as [[Social:Human trafficking|human trafficking]]; and counterfeit currency. Other stated objectives included expanding the tax base and increasing the number of taxpayers; reducing the number of transactions carried out by cash; reducing the finances available to terrorists and radical groups such as the Naxalite Maoists; and integrating the formal and informal economies.<ref>{{cite web | url=https://www.livemint.com/Opinion/sH5FSnXPkuAhknhzuPgH3M/Demonetisation-and-the-fight-against-black-money.html | title=Demonetisation and the fight against black money| date=7 November 2017}}</ref><ref>{{cite web | url=https://www.bloombergquint.com/business/demonetisation-was-not-designed-only-to-fight-black-money-says-finance-minister-jaitley | title=Demonetisation Was Not Designed Only to Fight Black Money, Says Finance Minister Jaitley| date=30 August 2017}}</ref><ref>{{cite news | url=https://timesofindia.indiatimes.com/business/india-business/demonetisation-achieved-objectives-quite-substantially-govt/articleshow/65598015.cms | title=Demonetisation achieved objectives quite substantially: Govt – Times of India| website=The Times of India| date=29 August 2018}}</ref>

===Shifting of goalposts===
The government was described as '[[Moving the goalposts|shifting the goalposts]]'<ref>{{cite news |last1=Sabnavis |first1=Madan |title=One year of demonetisation: Changing goal posts and limited impact |url=https://www.business-standard.com/article/economy-policy/one-year-of-demonetisation-changing-goal-posts-and-limited-impact-117110600176_1.html |access-date=11 November 2021 |work=Business Standard India |date=6 November 2017}}</ref><ref>{{cite news |title=RBI report on demonetisation: How Centre, BJP kept moving the goalposts |url=https://www.financialexpress.com/india-news/rbi-report-on-demonetisation-how-centre-bjp-kept-moving-the-goalposts/833966/ |access-date=11 November 2021 |work=The Financial Express |date=31 August 2017}}</ref><ref>{{cite news |title='PM Modi Shifting Goalposts on Demonetisation': On 4th Anniversary Congress Asks What Was Achieved |url=https://www.news18.com/news/politics/pm-modi-shifting-goalposts-on-demonetisation-on-4th-anniversary-congress-asks-what-was-achieved-3056774.html |access-date=11 November 2021 |work=News18 |date=8 November 2020 |language=en}}</ref> with respect to the goals of the demonetisation exercise. The initial stated goal was to curb black money, corruption, and terrorism, but as it became apparent that almost all the cash was being exchanged,<ref>{{cite news |title=Demonetisation: As money flowed back in, how goalposts were shifted |url=https://indianexpress.com/article/india/demonetisation-rbi-annual-report-arun-jaitley-pm-narendra-modi-as-money-flowed-back-in-how-goalposts-were-shifted-4821566/ |access-date=11 November 2021 |work=The Indian Express |date=31 August 2017 |language=en}}</ref> the goals were expanded to include making India a cashless economy, neutralisation of money held by Maoists, terrorists and human traffickers, among others.<ref>{{cite news |title=Instant Recall: How Modi Government Kept Changing Demonetisation's Goalposts |url=https://thewire.in/economy/modi-demonetisation-aims-golas |access-date=11 November 2021 |work=The Wire}}</ref>

===Black money=== 
The government estimated that ₹5 trillion, or approximately 20%, of the demonetised banknotes would be permanently removed from circulation.<ref>{{Cite news|url=http://indianexpress.com/article/business/economy/demonetisation-black-money-cash-crunch-rs-14-lakh-crore-in-old-notes-are-back-only-rs-75000-crore-out-rbi4465542/|title=Demonetisation: Rs 14 lakh crore in old notes are back, only Rs 75,000 crore out|date=9 January 2017|newspaper=The Indian Express|language=en|access-date=22 January 2017}}</ref> However, according to a 2018 report from the RBI, 99.3% of the demonetised banknotes, or ₹15.3 trillion of the ₹15.41 trillion that had been demonetised, were deposited with the banking system. The banknotes that were not deposited were worth ₹107.2 billion.<ref name="itoday1">{{Cite web|url=https://www.indiatoday.in/india/story/demonetisation-what-india-gained-and-lost-1327502-2018-08-30|title=Demonetisation: What India gained, and lost|last=Dutta|first=Prabash K.|date=30 August 2018|website=India Today|language=en|access-date=12 October 2018}}</ref> Commentators concluded that the government had failed in its aim of purging black money from the economy.<ref name="FTdemonetisationFail">{{cite news|url=https://www.ft.com/content/7dbe0e14-8d8a-11e7-a352-e46f43c5825d|title=India demonetisation failed to purge black money|website=Financial Times|date=31 August 2017|access-date=31 August 2017|last1=Mundy|first1=Simon|last2=Kazmin|first2=Amy|last3=Stacey|first3=Kiran}}</ref>

====Evasion====
[[File:Shop accepting 500 1000 rupee notes.jpg|thumb|A jewellery store in a shopping mall with a notice "We accept {{₹|500}} and {{₹|1000}} notes", even after they were no longer valid banknotes.]]
There were reports of people circumventing the restrictions imposed on exchange transactions by conducting multiple transactions at different bank branches, and by sending hired people, employees, and followers in groups to exchange large amounts of demonetised banknotes at banks.<ref>{{cite news|last1=Parmar|first1=Beena|title=Despite Rs 4000-cap on money exchange, loophole allows multiple transactions|url=http://www.hindustantimes.com/business-news/despite-rs-4000-cap-on-money-exchange-loophole-allows-multiple-transactions/story-lbw8xw5XCHvsS5DOawWB1O.html|access-date=13 November 2016|work=Hindustan Times|date=13 November 2016}}</ref><ref>{{cite web|url=http://indianexpress.com/article/india/india-news-india/demonetisation-in-chennai-to-beat-cash-limit-they-send-full-teams-to-bank-4375951/|title=Demonetisation: In Chennai, To beat cash limit, they send full teams to bank|date=15 November 2016|work=The Indian Express}}</ref> In Gujarat, [[Place:Delhi|Delhi]] and many other major cities, sales of gold increased post-demonetisation, surging the price as much as {{INRConvert|45|k}} from the ruling price of {{INRConvert|31.9|k}} per {{Convert|10|g}}.<ref name="Gold Price">{{cite web|url=http://www.newindianexpress.com/business/2016/nov/10/gold-price-recovers-on-renewed-demand-1536940.html|title=Gold price recovers on renewed demand |date=10 November 2016 |work=Hindustan Times |access-date=10 November 2016}}</ref><ref>{{Cite news | url=http://www.thehindu.com/news/national/other-states/scramble-for-gold-in-gujarat-after-demonetisation/article9323127.ece?homepage=true | title=Scramble for gold in Gujarat after demonetisation | work=The Hindu | date=9 November 2016 | access-date=9 November 2016 | author=Langa, Mahesh}}</ref> The Enforcement Directorate raided several forex establishments making backdated entries.<ref>{{cite news|title=Enforcement Directorate raids forex shops making back date entries|url=http://economictimes.indiatimes.com/news/politics-and-nation/enforcement-directorate-raids-forex-shops-making-back-date-entries/articleshow/55373554.cms|work=The Economic Times|date=16 November 2016}}</ref> Money laundering using backdated accounting was carried out by co-operative banks,<ref>{{cite news|url=http://timesofindia.indiatimes.com/city/mumbai/Netas-using-co-op-banks-for-backdated-FDs-DDs/articleshow/55467204.cms|title=Netas using co-op banks for backdated FDs, DDs – Times of India|website=The Times of India|date=17 November 2016 }}</ref> jewellers,<ref>{{cite news|url=http://economictimes.indiatimes.com/markets/commodities/news/jewellers-issue-backdated-invoices-to-clients/articleshow/55349735.cms|title=Jewellers issue backdated invoices to clients – The Economic Times|newspaper=The Economic Times|date=10 November 2016|last1=Sahgal|first1=Ram}}</ref> sellers of mobile phones,<ref>{{cite web|url=http://www.ibtimes.co.in/back-dated-receipts-used-apple-iphone-sales-after-demonetisation-report-706095|title=Back-dated receipts used for Apple iPhone sales after demonetisation: Report|first=Pranshu|last=Rathi|website=International Business Times|date=29 November 2016}}</ref> and several other businesses.<ref>{{cite web|url=http://indianexpress.com/article/india/demonetisation-tiffin-service-to-dental-implants-all-tried-to-beat-system-swap-old-notes-income-tax-department-raids-4410874/|title=Tiffin service to dental implants: All tried to beat system, swap old notes|date=5 December 2016}}</ref>

The cash deposited into ''hundis'' (cash collection boxes in temples and gurudwaras) are exempted from inquiry by the tax department; this is sometimes to launder money.<ref>{{cite web|url=http://www.thenewsminute.com/article/rs-500rs-1000-demonetisation-temple-money-hundis-not-come-under-scanner-52701|title=Rs 500/Rs 1000 demonetisation: Temple money from hundis not to come under scanner|date=10 November 2016}}</ref><ref>{{Cite web|url=http://www.huffingtonpost.in/2016/11/13/13-ways-in-which-indians-will-convert-their-black-money-into-whi/|title=13 Ways In Which Indians Will Convert Their Black Money Into White Even After Demonetisation}}</ref> After the demonetisation, there was a spike in donations in the form of the demonetised banknotes in temples.<ref>{{cite web|url=http://www.firstpost.com/india/demonetisation-temples-across-india-receive-high-currency-notes-as-donations-3112230.html|title=Demonetisation: Temples across India receive high currency notes as donations|date=18 November 2016}}</ref><ref>{{cite news|url=http://timesofindia.indiatimes.com/city/jaipur/religious-places-getting-over-the-demon-of-note-ban/articleshow/56041804.cms|title=Religious places getting over the 'demon' of note ban – Times of India|website=The Times of India|date=18 December 2016 }}</ref><ref>{{cite web|url=http://timesofindia.indiatimes.com/city/bhubaneswar/Rush-to-offer-Rs-500-Rs-1000-donations-at-Puri-Temple/articleshow/55347249.cms|title=Rush to offer Rs 500, Rs 1000 donations at Puri Temple|work=The Times of India|date=10 November 2016|first1=Debabrata|last1=Mohapatra }}</ref> People booked large numbers of railway tickets to dispose of unaccounted cash. This came to the notice of the Indian Railways authorities, who imposed restrictions to check evasion.<ref name=":0">{{cite news|title=Rlys sets 5000 as cash refund limit for tickets|url=http://timesofindia.indiatimes.com/city/mumbai/Rlys-sets-5000-as-cash-refund-limit-for-tickets/articleshow/55444673.cms|access-date=15 November 2016}}</ref><ref>{{cite news|title=Railways say, no cash refund for tickets booked between Nov 9-11|url=http://zeenews.india.com/economy/railways-say-no-cash-refund-for-tickets-booked-between-nov-9-11_1949831.html|access-date=15 November 2016}}</ref>

===Counterfeit banknotes===
{| class="wikitable floatright"
|+Number of counterfeit banknotes detected in banks (April – March)<ref name="wire2018a"/>
!Denomination
!style="text-align:right" |2015–16
!style="text-align:right" |2016–17
!style="text-align:right" |2017–18
|-
|₹1
|style="text-align:right" |2
|style="text-align:right" |3
|style="text-align:right" |4
|-
|₹2 and ₹5
|style="text-align:right" |2
|style="text-align:right" |80
|style="text-align:right" |1
|-
|₹10
|style="text-align:right" |134
|style="text-align:right" |523
|style="text-align:right" |287
|-
|₹20
|style="text-align:right" |96
|style="text-align:right" |324
|style="text-align:right" |437
|-
|₹50
|style="text-align:right" |6,453
|style="text-align:right" |9,222
|style="text-align:right" |23,447
|-
|₹100
|style="text-align:right" |221,447
|style="text-align:right" |177,195
|style="text-align:right" |239,182
|-
|₹200
|style="text-align:right" |NA
|style="text-align:right" |NA
|style="text-align:right" |79
|-
|₹500 (old)
|style="text-align:right" |261,695
|style="text-align:right" |317,567
|style="text-align:right" |127,918
|-
|₹500 (new)
|style="text-align:right" |NA
|style="text-align:right" |199
|style="text-align:right" |9,892
|-
|₹1000
|style="text-align:right" |143,099
|style="text-align:right" |256,324
|style="text-align:right" |103,611
|-
|₹2000
|style="text-align:right" |NA
|style="text-align:right" |638
|style="text-align:right" |17,929
|-
|Total
|style="text-align:right" |632,926
|style="text-align:right" |762,027
|style="text-align:right" |522,783
|}
After demonetisation, there was an increase in the number of counterfeit {{₹|100}} and {{₹|50}} banknotes. The number of counterfeit {{₹|500}} and {{₹|1000}} (demonetised version) banknotes saw an increase in 2016–17 and subsequently a decline in 2017–18. But in 2017–18, there was an increase in counterfeit {{₹|500}} and {{₹|2000}} (new version) banknotes than the previous year.<ref name="wire2018a">{{Cite web|url=https://thewire.in/economy/how-successful-was-demonetisation-four-takeaways-from-the-rbis-annual-report|title=How Successful was Demonetisation? Four Takeaways From the RBI's Annual Report|date=30 August 2018|website=The Wire|access-date=13 October 2018}}</ref> There has been no significant change in the number of counterfeit banknotes detected. In 2017–18, the number of detected counterfeit banknotes was close to the number before demonetisation.<ref name="mintsep18"/> Additionally, after demonetisation, only 0.0035% of the {{₹|1000}} banknotes were found to be counterfeit.<ref>{{Cite news|url=http://www.thehindu.com/business/Economy/only-12-of-demonetised-1000-notes-did-not-return-rbi/article19587973.ece|title=Only 1.2% of ₹1,000 notes not returned to banks: RBI report|date=30 August 2017|access-date=26 February 2018|via=www.thehindu.com|newspaper=The Hindu}}</ref>

===Tax collection===
{{Image frame |align=left |caption=Tax-to-GDP ratio (%)<ref name="mintsep18"/>|content=
{{Graph:Chart|width=350|height=100|xAxisTitle=Financial Year|yAxisTitle=Tax-to-GDP ratio (%)|type=line|x=2011–12, 2012–13, 2013–14, 2014–15, 2015–16,2016–17,2017–18,2018–19|y=10.2,10.4,10.1,10,10.6,11.2,11.6|colors=#ff8000}}}}
The number of income tax returns filing increased from 43.3 million to 52.9 million between the financial year of 2016 and 2017, which was not a significant increase compared to the increase between 2015 and 2016. The tax compliance had increased with a number of income tax returns filing increased but the majority of them were from salaried and non-business class. The income tax collections increased in the financial year of 2017 due to Income Disclosure Scheme 2016. If adjusted for it, the increase in tax collection was modest. The tax-to-GDP ratio has increased due to expanding tax base.<ref name="mintaa18">{{cite web | url=https://www.livemint.com/Politics/C4Q8mpskSbfEzmG8ZWBY9H/Can-we-measure-demonetisations-impact-on-income-tax-collect.html | title=Has demonetisation really boosted income tax collections?| date=23 May 2017}}</ref><ref name="mintsep18"/> An analysis of the economic data shows that there has been no substantial increase in the number of new tax payers or direct tax collection due to demonetisation.<ref>{{cite web | url=https://www.ndtv.com/india-news/did-demonetisation-increase-tax-base-not-really-1772370 | title=Did Demonetisation Increase Tax Base? Not Really}}</ref><ref name="mintaa18"/><ref>{{Cite news | url=https://economictimes.indiatimes.com/markets/stocks/news/did-cash-ban-help-raise-tax-base-itrs-rising-but-not-tax-collection/articleshow/65896757.cms | title=Did cash ban help raise tax base? ITRs rising, but not tax collection| newspaper=The Economic Times| date=25 September 2018| last1=Sharma| first1=Tanisha}}</ref> Indirect tax/GDP ratio also remained on the trend path and had no visible impact.<ref name="Lahiri 63, 55–74"/>

The use of demonetised banknotes was allowed for the payment of municipal and local civic body taxes, leading to a jump in their revenue collections. For example, the Greater Hyderabad Municipal Corporation reported collecting about ₹1.6 billion in cash payments of outstanding and advance taxes within the first four days of demonetisation.<ref>{{cite web|url=http://zeenews.india.com/news/hyderabad/demonetisation-impact-greater-hyderabad-municipal-corporation-collects-over-rs-160-crore-in-just-four-days_1949989.html|title=Demonetisation impact: Greater Hyderabad Municipal Corporation collects over Rs 160 crore in just four days|date=15 November 2016|publisher=india.com}}</ref>

===Digital payments===
The push for digital payments was one of the stated intentions of demonetisation.<ref name="mintdigpay">{{cite web | url=https://www.livemint.com/Industry/yjsk66xEwwIe7OOqcoC92N/Was-the-boost-in-digital-payments-after-demonetization-tempo.html | title=Was the boost in digital payments after demonetization temporary?| date=26 April 2018}}</ref><ref>{{Cite magazine|last=Heller|first=Nathan|title=India Takes a Big Step Back from Cash|url=https://www.newyorker.com/business/currency/india-takes-a-big-step-back-from-cash|magazine=The New Yorker}}</ref><ref name=":5">{{Cite journal|last=Dwivedi|first=Yogesh|title=India taking a step on the road to cashless economy|url=https://theconversation.com/india-taking-a-step-on-the-road-to-cashless-economy-70309|journal=The Conversation|date=20 December 2016 }}</ref><ref name=":6">{{Cite journal|last=Wade|first=Shepard|title=A Cashless Future Is The Real Goal Of India's Demonetization Move|url=https://www.forbes.com/sites/wadeshepard/2016/12/14/inside-indias-cashless-revolution/|journal=Forbes}}</ref> There was an immediate and sharp jump in digital payments in November–December 2016 owing to shortages of cash. The debit card point of sales transactions was twice the size of value suggested by trends before demonetisation. The value of credit cards increased but no sharp growth was seen. The mobile wallet transactions picked up immediately after demonetisation, followed by a dip in mid-2017 due to easing cash shortages. There was again sharp rise thereafter. By April 2018, the volume of the digital payments had doubled.<ref name="mintdigpay"/> After return of the cash, the growth in digital payment had been modest.<ref name="mintsep18"/><ref name="mintdigpay"/>

The currency-to-GDP ratio was 12.1% in 2015–16. It declined to 8.8% in 2016–17 due to demonetisation but increased again to 10.9% in 2017–18.<ref name="wire2018a"/> The currency-to-GDP ratio was only marginally lower compared to levels before demonetisation.<ref name="mintsep18"/>

===Banknotes in circulation===
{{Image frame |align=right|caption=Cash in circulation<ref>{{cite web |title=Reserve Bank of India - Press Releases |url=https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx |website=rbi.org.in |access-date=11 November 2021}}</ref>|content=
{{Graph:Chart
 | yAxisTitle = Cash in circ. (₹ trillions)
 | xAxisAngle=-45
 | width = 400
 | height = 100
 | type = line
 | x = Mar '16, Oct '16, Mar '17, Oct '17, Mar '18, Oct '18, Mar '19, Oct '19, Mar '20, Oct '20, Mar '21, Oct '21
 | y = 16.63, 17.77, 13.35, 16.35, 18.29, 19.73, 21.37, 22.58, 24.47, 27.15, 28.54, 29.44
}}
}}
On 28 October 2016, the total banknotes in circulation in India were valued at ₹17.77 trillion; what proportion of this derived from {{₹|500}} and {{₹|1000}} banknotes was unknown. In its annual report of March 2016, the Reserve Bank of India (RBI) stated that total banknotes in circulation valued ₹16.42 trillion, of which nearly 86% (around ₹14.18 trillion) derived from {{₹|500}} and {{₹|1000}} banknotes. In terms of volume, the report stated that 24% (around 22.03 billion) of the total 90.26 billion (9026.6 crore) banknotes in circulation were {{₹|500}} and {{₹|1000}} banknotes.<ref name="equipped">{{cite web|url=http://indianexpress.com/article/opinion/web-edits/rs-500-rs-1000-notes-are-banks-equipped-to-replace-1874-crore-pieces-of-notes-4364746/|title=Are banks equipped to replace 2,300 crore pieces of Rs 500 and Rs 1,000 notes?|date=9 November 2016|work=The Indian Express|access-date=9 November 2016|author=Damodaran, Harish}}</ref>

Before demonetisation (November 2016), there were banknotes worth ₹17.97 trillion in the market. The demonetised banknotes constituted 86.4% of it.<ref name="itoday1" /> The banknotes in circulation had reached to the level before demonetisation in March 2018.<ref name="mintsep18">{{cite web|url=https://www.livemint.com/Industry/G0nNMoXXS8eVmW1oqUa1TP/Demonetisation-has-impacted-GDP-growth-to-black-money.html |title=From GDP growth to black money, costs outweigh benefits of demonetisation|first1=Vishnu|last1=Padmanabhan|access-date=20 October 2018|date=3 September 2018|work=Mint}}</ref> By March 2018, there were banknotes worth ₹18.03 trillion in the market; an 
increase of 9.9%. New banknotes of {{₹|2000}} and {{₹|500}} constitute 80.6% of it. Thus, small domination banknotes increased by only 5.8%.<ref name="itoday1" /> The volume of banknotes in the market increased by 2.1%.<ref name="wire2018a" /> The banknotes in circulation had further increased to ₹19.5 trillion in September 2018<ref>{{cite web | url=https://www.thehindubusinessline.com/money-and-banking/currency-in-circulation-slows-down-since-may-finds-sbi-report/article25027689.ece | title=Currency in circulation slows down since May| date=24 September 2018}}</ref> and ₹21.41 trillion in March 2019, 19.14% higher than the level before demonetisation.<ref>{{Cite web|url=https://indianexpress.com/article/business/economy/cash-in-circulation-jumps-19-1-from-pre-demonetisation-level-5637325/|title=Cash in circulation jumps 19.1 per cent from pre-demonetisation level|date=22 March 2019|website=The Indian Express|language=en-IN|access-date=25 March 2019}}</ref> Five years after demonetisation, the currency in circulation was at a record high of ₹29.17 trillion on 29 October 2021.<ref>{{cite news |title=Five Years Since Demonetisation, Value Of Cash In Circulation Up 64% |url=https://www.ndtv.com/business/five-years-since-demonetisation-currency-notes-rise-64-in-value-terms-2602165 |access-date=11 November 2021 |work=NDTV.com}}</ref><ref>{{cite news |title=Nearly 5 years since note ban: Cash with public rising, at all-time high |url=https://indianexpress.com/article/business/nearly-5-years-since-note-ban-cash-with-public-rising-at-all-time-high-7607688/ |access-date=11 November 2021 |work=The Indian Express |date=5 November 2021 |language=en}}</ref>

===Terrorism and internal security===
Initially following demonetization, activities and attacks by the Maoist Naxalite radical groups decreased, which was attributed to lack of finance following demonetisation. The surrender rate had reached its highest.<ref>{{cite news|url=http://timesofindia.indiatimes.com/india/Demonetisation-leads-to-largest-Maoist-surrenders/articleshow/55675983.cms|title=Demonetisation leads to highest ever surrender of Maoists in a month – Times of India|website=The Times of India|date=29 November 2016 }}</ref><ref>{{cite web|url=http://timesofindia.indiatimes.com/city/patna/Cops-look-for-Maoists-with-old-currency/articleshow/55377997.cms|archive-url=https://archive.today/20161128064247/http://timesofindia.indiatimes.com/city/patna/Cops-look-for-Maoists-with-old-currency/articleshow/55377997.cms|archive-date=28 November 2016|title=Cops look for Maoists with old currency|work=The Times of India|url-status=dead}}</ref><ref name="indiatimes.com">{{cite news|url=http://timesofindia.indiatimes.com/city/nagpur/Modis-demonetization-set-to-cripple-Naxalites-financially/articleshow/55379177.cms|title=Modi's demonetization set to cripple Naxalites financially |work=The Times of India|date=12 November 2016 }}</ref><ref>{{Cite web|url=https://www.ndtv.com/india-news/this-is-how-big-note-ban-will-affect-maoist-activities-in-chhattisgarh-1624880|title=This Is How Big Note Ban Will Affect Maoist Activities In Chhattisgarh|website=NDTV.com}}</ref><ref>{{cite web|url=http://indianexpress.com/article/india/india-news-india/demonetisation-to-hit-maoist-activities-in-chhattisgarh-police-4372900/|title=Demonetisation to hit Maoist activities in Chhattisgarh: Police|date=13 November 2016}}</ref> The activities returned within few months.<ref>{{cite web | url=https://www.firstpost.com/politics/congress-says-demonetisation-didnt-affect-maoism-says-17-naxal-attacks-took-place-since-note-ban-4216031.html | title=Congress says demonetisation didn't affect Maoism, says 17 Naxal attacks took place since note ban| date=18 November 2017}}</ref><ref>{{cite web | url=https://www.firstpost.com/india/demonetisation-caused-little-disruption-to-maoist-economy-in-bastar-extortion-remains-major-source-of-funding-4831321.html | title=Demonetisation caused little disruption to Maoist economy in Bastar, extortion major source of funding| date=27 July 2018}}</ref> There was a decrease in the terror activities in Jammu and Kashmir.<ref>{{Cite news | url=https://economictimes.indiatimes.com/news/defence/demonetisation-effect-funds-tap-turns-dry-for-terror-and-maoist-groups/articleshow/55448082.cms | title=Demonetisation effect: Funds tap turns dry for terror and Maoist groups| newspaper=The Economic Times| date=13 July 2018| last1=Jain| first1=Bharti}}</ref><ref>{{cite web | url=https://www.governancenow.com/news/regular-story/did-demonetisation-impact-terrorism | title=Did demonetisation impact terrorism?| date=23 November 2017}}</ref>

==Other effects==
[[File:Cashless ATM.jpg|thumb|Cashless ATM as on 1 December]]

===Shortage of cash===
[[File:Queue at ATM for INR 100 Notes - Howrah 2016-11-08 1773.JPG|thumb|Queue at an ATM for {{INR}}100 banknotes in Howrah, on 8 November 2016, 22:23 (IST)|right]]

The scarcity of cash due to demonetisation led to chaos, and people faced difficulties in depositing or exchanging the demonetised banknotes due to long queues outside banks and ATMs across India.<ref name="dryatm">{{cite web|url=http://www.aljazeera.com/news/2016/11/india-demonetisation-chaos-atms-run-dry-161109061403011.html|title=India demonetisation: Chaos as ATMs run dry|publisher=Al Jazeera|date=9 November 2016|access-date=9 November 2016}}</ref><ref name=IEchaos>{{cite web|url=http://indianexpress.com/article/india/india-news-india/demonetisation-chaos-grows-queues-get-longer-at-banks-atms-on-weekend-4371373/|title=Demonetisation: Chaos grows, queues get longer at banks, ATMs on weekend|work=Indian Express|date=12 November 2016}}</ref><ref>{{cite web|first=Mayuresh|last=Ganapatye|url=http://indiatoday.intoday.in/story/demonetisation-long-queues-banks-atms-mumbai/1/830100.html|title=Demonetisation: Month later, long queues still outside banks and ATMs in Mumbai|publisher=India Today|date=8 December 2016}}</ref> The ATMs were short of cash for months after demonetisation.<ref>{{cite web|url=http://www.hindustantimes.com/india-news/demonetisation-pain-returns-one-fourth-atms-across-india-running-dry-again/story-kwOMTU7I3xEVyeIGYsHSLP.html|title=Demonetisation pain returns: One-fourth of ATMs across India running dry again|date=7 February 2017|work=Hindustan Times}}</ref><ref>{{cite web|url=http://indianexpress.com/article/business/banking-and-finance/as-atms-dry-up-bankers-say-normalcy-will-return-soon-4609546/ |title=As ATMs dry up, bankers say normalcy will return soon |work=The Indian Express |date= 11 April 2017|access-date=25 April 2017}}</ref><ref>{{Cite news|url=http://www.thehindu.com/news/cities/Visakhapatnam/atms-run-out-of-cash-in-many-areas/article18129175.ece |title=ATMs run out of cash in many areas |newspaper=The Hindu |date=19 April 2017 |access-date=25 April 2017|last1=Gopal |first1=B. Madhu }}</ref>

During the demonetisation, police and tax officials across India seized ₹6.1 billion in unaccounted money, including ₹1.1 billion in new banknotes.<ref>{{cite news | url=http://timesofindia.indiatimes.com/articleshow/59509184.cms | title=17% of cash seized in raids during demonetisation were in new notes – Times of India| website=The Times of India| date=9 July 2017}}</ref> Reports in the media noted that although the general public faced a severe cash shortage, some individuals were able to amass tens of millions of rupees in new banknotes; they thus described the demonetisation exercise as being futile.<ref name="242cr">{{cite web|url=http://www.hindustantimes.com/india-news/cash-crunch-rs-242-crore-in-new-currency-seized-after-demonetisation/story-ZFidspQbfQqcIGbQPcgtPJ.html|title=Cash crunch? Rs 242 crore in new currency seized after demonetisation|date=9 December 2016|publisher=Hindustan Times}}</ref><ref>{{Cite web|url=http://www.catchnews.com/india-news/over-rs-164-crore-black-money-seized-in-new-notes-has-note-ban-failed-1481558486.html|title=Over Rs 164 crore black money seized in new notes. Has note ban failed?|website=CatchNews.com}}</ref><ref>{{cite web|url=http://indianexpress.com/article/india/police-seize-new-currency-notes-worth-crores-across-several-cities/|title=As India struggles for its next Rs 2,000, new currency seized across country can fill gunny bags|date=9 December 2016}}</ref>

===Transport ===
The All India Motor Transport Congress claimed that about 800,000 truck drivers and conductors were affected with the shortage of cash, with around 400,000 trucks stranded on major highways across India.<ref>{{cite web|url=http://www.dnaindia.com/india/report-demonetization-with-no-cash-on-hand-4-lakh-trucks-stranded-on-highways-2273414|title=Demonetization: With no cash on hand, 4 lakh trucks stranded on highways|access-date=14 November 2016|date=14 November 2016}}</ref> Major toll plazas in Gujarat and on the Delhi-Mumbai highways also saw long queues as toll plaza operators refused the demonetised banknotes.<ref name="toll">{{cite web|url=http://www.hindustantimes.com/india-news/toll-collection-suspended-across-the-country-till-nov-11-highways-ministry/story-1bAQIFhgp3R26ja4z9OdDK.html |title=Toll tax suspended on national highways till Nov 11, banks open this weekend |work=Hindustan Times |access-date=10 November 2016|date=9 November 2016 }}</ref> The Ministry of Road Transport and Highways subsequently announced a suspension of toll collections on all national highways across the country until 2 December as well as acceptance of demonetised {{₹|500}} banknotes as a toll from 2 to 15 December.<ref>{{Cite web|url=https://www.businesstoday.in/current/economy-politics/toll-plaza-collection-on-national-highways-suspended-till-december-2/story/241027.html|title=Toll collection on all national highways suspended till December 2|website= Business Today|date=24 November 2016 |access-date=17 October 2018}}</ref>

===Stock market===
As a combined effect of demonetisation and the US presidential election, the stock market indices dropped to an around six-month low in the week following the announcement. The day after the demonetisation announcement, BSE SENSEX crashed nearly 1,689 points and NIFTY 50 plunged by over 541 points.<ref name="stockcrash9nov">{{Cite news|url=http://www.thehindu.com/business/markets/stock-market-news-november-9-2016/article9322930.ece|title=Sensex crashes 1,689 points on black money crackdown, U.S. election|newspaper=The Hindu|access-date=9 November 2016|date=9 November 2016|last1=Rukhaiyar|first1=Ashish}}</ref> By the end of the intraday trading section on 15 November 2016, the BSE SENSEX index was lower by 565 points and the NIFTY 50 index was below 8100 intraday.<ref>{{cite web|url=http://www.moneycontrol.com/news/local-markets/sensex-sinks-514pts-midcap-down-4demonetisationearnings_7965381.html|title=Sensex sinks 514pts, Midcap down 4% on demonetisation & earnings |date=15 November 2016 |publisher=moneycontrol.com|access-date=16 November 2016}}</ref> There were marginal effects on the stock market during November–December 2016.<ref>{{Cite news|url=https://www.livemint.com/Money/hRb1noUQV17fmP0o1GNQEJ/How-much-has-demonetisation-affected-the-stock-market.html|title=How much has demonetisation affected the stock market?|last=Chakravarty|first=Manas|date=3 January 2017|work=LiveMint|access-date=17 October 2018}}</ref> A data study (July 2016 – February 2017) of 54 companies across 13 sectors listed with the NSE showed that companies in cement, cotton and rubber sectors showed an increase in total trades while companies in automotive, clothing, foods, paper, real estate, retail, steel, sugar, tea and textiles sectors showed a decrease in total trades after demonetisation.<ref>{{Cite book|url=https://www.researchgate.net/publication/320487258|title=Impact of Demonetisation on Indian Stock Market|last=Mukundan|first=Anagha|date=1 June 2017|doi=10.13140/rg.2.2.24870.63042|publisher=A P J Abdul Kalam Technological University}}</ref> Demonetisation had a negative impact on stock market returns evidenced from NIFTY 50 and other NIFTY sectoral indices.<ref>{{Cite journal|last1=Anoop|first1=Patil|last2=Parab|first2=Narayan|last3=Reddy|first3=Y. V|date=2018|title=Analyzing the Impact of Demonetization on the Indian Stock Market: Sectoral Evidence using GARCH Model|journal=Australasian Accounting, Business and Finance Journal|language=en|volume=12|issue=2|pages=104–116|doi=10.14453/aabfj.v12i2.7|issn=1834-2000|doi-access=free}}</ref>

===Industrial output===
There was a reduction in industrial output as industries were hit by the cash shortage.<ref>{{Cite news|url=http://www.thehindu.com/news/national/other-states/Demonetisation-hit-economy-Jamir/article17349806.ece|title=Demonetisation hit economy: Jamir|date=23 February 2017|work=The Hindu|access-date=26 February 2017|language=en}}</ref> The [[Social:Purchasing Managers' Index|Purchasing Managers' Index]] (PMI) fell to 46.7 in November 2016 from 54.5 in October 2016, recording its sharpest reduction in three years.<ref name=BS-PMI>{{Cite news|url=http://www.business-standard.com/article/economy-policy/slowdown-due-to-demonetisation-pmi-services-shrinks-in-november-after-17-months-116120501411_1.html|title=Slowdown due to demonetisation: PMI services shrinks in November after 17 months|first=Dilasha|last=Seth|date=6 December 2016|via=Business Standard|newspaper=Business Standard India}}</ref> A reading above 50 indicates growth and a reading below shows contraction. This indicates a slowdown in both manufacturing and services industries.<ref name=WorryingNumbers>{{Cite web|url=http://www.huffingtonpost.in/2017/01/03/five-worrying-numbers-that-show-demonetisation-impact-on-economy/|title=5 Bleak Numbers That Show Demonetisation Impact On The Economy}}</ref> The PMI report also showed that the reduction in inflation in November 2016 was due to a shortage in money supply.<ref name=BS-PMI />

The growth in eight core sectors such as cement, steel and refinery products, which constitute 38% of the [[Finance:Index of industrial production|Index of industrial production]] (IIP), was only to 4.9 percent in November 2016, as compared with 6.6 percent a month prior.<ref name=WorryingNumbers /><ref>{{cite web|url=http://www.firstpost.com/business/demonetisation-impact-three-sets-of-numbers-tell-us-how-modis-gamble-has-slowed-the-economy-3185066.html|title=Demonetisation impact: Three sets of numbers tell us how Modi's gamble has slowed the economy|date=3 January 2017}}</ref>

===Agriculture===
Demonetisation adversely affected transactions in the agriculture sector, which are heavily dependent on cash.<ref>{{Cite news|url=http://www.huffingtonpost.in/nidhi-nath-srinivas/how-demonetisation-has-affected-indias-agricultural-and-food-ma/|title=How Demonetisation Has Affected India's Agricultural And Food Markets|newspaper=Huffington Post India|access-date=24 November 2016|archive-url=https://web.archive.org/web/20161125110124/http://www.huffingtonpost.in/nidhi-nath-srinivas/how-demonetisation-has-affected-indias-agricultural-and-food-ma/|archive-date=25 November 2016|url-status=dead}}</ref> Due to scarcity of the new banknotes, many farmers had insufficient cash to purchase seeds, fertilisers and pesticides needed for the plantation of rabi crops usually sown around mid-November.<ref>{{Cite news|url=http://www.firstpost.com/business/demonetisation-farmers-fear-loss-of-crops-and-income-after-currency-ban-3111694.html|title=Demonetisation: Farmers fear loss of crops and income after currency ban|date=18 November 2016|newspaper=Firstpost|language=en-US|access-date=24 November 2016}}</ref> Farmers and their unions conducted protest rallies in Gujarat, Amritsar and Muzaffarnagar against the demonetisation as well as against restrictions imposed by the Reserve Bank of India on district cooperative central banks which were ordered not to accept or exchange the demonetised banknotes.<ref>{{Cite news|url=http://www.livemint.com/Politics/EgxO4VZMZJKpkiFwEvHEUL/Demonetisation-Farmers-protest-in-Muzaffarnagar-over-cash-s.html|title=Demonetisation: Farmers protest in Muzaffarnagar over cash shortage|agency=Press Trust of India|date=22 November 2016}}</ref><ref>{{Cite news|url=http://indianexpress.com/article/india/india-news-india/demonetisation-at-gujarat-protests-farmers-dump-milk-vegetables-on-road-4385111/|title=Demonetisation: At Gujarat protests, farmers dump milk, vegetables on road|date=20 November 2016|newspaper=The Indian Express|access-date=24 November 2016}}</ref><ref>{{Cite news|url=http://www.hindustantimes.com/punjab/farmers-in-amritsar-stage-protest-burn-pm-modi-s-effigy/story-NlBIKQoj479XSv1DfQ5QAJ.html|title=Farmers in Amritsar stage protest against demonetisation, burn PM Modi's effigy|date=19 November 2016|newspaper=Hindustan Times}}</ref>

The shortage of cash led to plunge in demand which in turn led to a crash in the prices of crops. Farmers were unable to recover even the costs of transportation from their fields to the market from the low prices offered.<ref>{{cite web|url=http://www.hindustantimes.com/india-news/farmers-forced-to-dump-the-produce-as-note-ban-turns-bumper-crop-worthless/story-q79Oaf8eGTLX0yaHXwkJLL.html|title=Farmers forced to dump their produce as note ban turns bumper crop worthless|date=26 December 2016|newspaper=Hindustan Times|access-date=15 January 2017}}</ref><ref name=50psOnions>{{cite web|url=http://indiatoday.intoday.in/story/onion-prices-crash-india-crop-farmers-dumps-crop-mandi/1/841577.html|title=Oh-nion: Farmers in crisis dump produce in markets instead of selling at 50 paise a kilo|publisher=India Today|access-date=15 January 2017}}</ref> Some farmers dumped their produce in protest against the government.<ref name=ludhianaprotest>{{cite web|url=http://indianexpress.com/article/india/demonetisation-protest-farmers-throw-vegetables-on-road/|title=Demonetisation protest: Farmers throw vegetables on road|date=7 January 2017|access-date=15 January 2017}}</ref><ref>{{cite web|url=http://indianexpress.com/article/india/india-news-india/demonetisation-at-gujarat-protests-farmers-dump-milk-vegetables-on-road-4385111/|title=Demonetisation: At Gujarat protests, farmers dump milk, vegetables on road|date=20 November 2016|access-date=15 January 2017}}</ref>

Demonetisation resulted in the relative erosion of agricultural wages and weak bargaining power of farmers for their produce.<ref>{{Cite news|url=https://www.hindustantimes.com/india-news/two-years-after-demonetisation-crisis-in-rural-india/story-tgyDzJhZSro5sPPtabcKXP.html|title=Two years after demonetisation, farmers and rural workers are unhappy|last=Kishore|first=Roshan|date=7 November 2018|work=Hindustan Times|access-date=17 November 2018|language=en}}</ref>

===Real GDP growth rate===
{{Image frame |align=center |caption=Real GDP growth rate – Quarterly (%)<ref name="hindugdp"/><ref name="toi72"/><ref name="wire63"/><ref name="hindu74"/>|content=
{{Graph:Chart|width=500|height=100|xAxisTitle=Quarterly results in Financial Year|yAxisTitle=Real GDP growth rate (%)|type=line|x=Q1'15,Q2'15,Q3'15,Q4'15,Q1'16,Q2'16,Q3'16,Q4'17,Q1'17,Q2'17,Q3'17,Q4'18,Q1'18,Q2'18,Q3'18,Q14'19|yTitle=|y=7,7.4,7.2,9.1,7.9,7.5,7,6.1,5.7,6.3,7.2,7.6,7.7,8.2|colors=#0000aa}}}}
{{Image frame |caption=Real GDP growth rate – Year-on-Year (%)<ref name="GDPImpact"/>|align=left|content=
{{Graph:Chart|width=200|height=100|xAxisTitle=Financial Year|yAxisTitle=Real GDP growth rate (%)|type=line|x=2015–16,2016–17,2017–18,2018–19|y=8,7.1,6.5,|colors=#ff8000}}}}
{| class="wikitable" align="right"
|+Real GDP growth rate<ref name="hindugdp">{{Cite news|url=https://www.thehindu.com/business/Economy/gdp-growth-slips-to-57-in-april-june/article19594596.ece|title=GDP growth slips to 5.7% in April–June|date=31 August 2017|work=The Hindu|access-date=19 October 2018|language=en-IN|issn=0971-751X}}</ref><ref name="toi72">{{Cite news|url=https://timesofindia.indiatimes.com/business/india-business/gdp-grows-at-5-quarter-high-of-7-2-in-oct-dec/articleshow/63118408.cms|title=GDP grows at 5-quarter high of 7.2% in Oct–Dec|work=The Times of India|access-date=19 October 2018}}</ref><ref name="wire63">{{Cite web|url=https://thewire.in/economy/gdp-growth-recovers-6-3-september-quarter|title=GDP Growth Recovers to 6.3% in September Quarter|website=The Wire|access-date=19 October 2018}}</ref><ref name="hindu74">{{Cite news|url=https://www.thehindu.com/business/Economy/gdp-growth-accelerates-to-74-in-julysept-manufacturing-rebounds-significantly/article7933726.ece|title=GDP growth accelerates to 7.4 % in July–Sept. manufacturing rebounds significantly|last=Raghavan|first=Tca Sharad|date=30 November 2015|work=The Hindu|access-date=20 October 2018|language=en-IN|issn=0971-751X}}</ref> (base year 2011–12)
!Financial Year
!Quarter
!Quarterly
!Yearly
|-
| rowspan="4" |2015–16
|Q1 (April–June)
|7%
| rowspan="4" |8%<ref name="GDPImpact" />
|-
|Q2 (July–September)
|7.4%
|-
|Q3 (October–December)
|7.2%
|-
|Q4 (January–March)
|9.1%
|-
| rowspan="4" |2016–17
|Q1 (April–June)
|7.9%
| rowspan="4" |7.1%<ref name="GDPImpact">{{cite web|url=http://www.firstpost.com/business/demonetisation-impact-gdp-dips-sharply-in-jan-mar-quarter-to-6-1-manufacturing-mining-disappoints-3502487.html|title=Demonetisation impact: GDP dips sharply in Jan–Mar to 6.1%; India loses fastest growing tag|date=31 May 2017|publisher=Firstpost.com|access-date=26 June 2017}}</ref>
|-
|Q2 (July–September)
|7.5%
|-
|Q3 (October–December)
|7%
|-
|Q4 (January–March)
|6.1%
|-
| rowspan="4" |2017–18
|Q1 (April–June)
|5.7%
| rowspan="4" |6.5%
|-
|Q2 (July–September)
|6.3%
|-
|Q3 (October–December)
|7.2%
|-
|Q4 (January–March)
|7.6%
|-
| rowspan="4" |2018–19
|Q1 (April–June)
|7.7%
| rowspan="4" |
|-
|Q2 (July–September)
|8.2%
|-
|Q3 (October–December)
|
|-
|Q4 (January–March)
|
|}
<br />
Global analysts cut their forecasts of India's real [[Finance:Gross domestic product|GDP]] growth rate for the financial year 2016–17 by 0.5 to 3% due to demonetisation.<ref name=LivemintGDP>{{cite web|url=http://www.livemint.com/Politics/gG3pF45hFU53GyXE1BwIuJ/Cash-crunch-Analysts-cut-India-GDP-growth-forecast.html|title=Cash crunch: Analysts cut India GDP growth forecast|last=Livemint|date=24 November 2016}}</ref><ref name=FinexGDP>{{cite web|url=http://www.financialexpress.com/economy/economists-bearish-on-the-india-growth-story-predicts-sub-6-per-cent-for-fy-2017/486381/|title=Demonetisation a big blow! GDP growth may dip below 6% in FY17|date=26 December 2016}}</ref> India's GDP in 2016 is estimated to be US$2.25 trillion, hence, each 1 per cent reduction in growth rate represents a shortfall of US$22.5 billion (₹1.54 trillion) for the Indian economy.<ref>{{cite web | url=http://www.imf.org/external/pubs/ft/weo/2016/02/weodata/weorept.aspx?sy=2014&ey=2021&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=26&pr1.y=13&c=534&s=NGDPD&grp=0&a= | title=World Economic Outlook Database | publisher=[[Organization:International Monetary Fund|International Monetary Fund]] | date=October 2016}}</ref> According to Societe Generale, quarterly GDP growth rates would drop below 7% for an entire year at a stretch for the first time since June 2011.<ref>{{cite web|url=https://www.cnbc.com/2017/01/17/india-demonetisation-news-india-could-see-four-consecutive-quarters-of-below-7-percent-growth.html|title=India set for slowest growth period as demonetization dents economy|first=Saheli Roy|last=Choudhury|website={{wipe|CNBC}}|date=17 January 2017}}</ref>

The Q4'16–17 rate was 6.1% as against a forecast of 7.1% by economists.<ref>{{cite web|url=http://www.businesstoday.in/current/economy-politics/demonetisation-hits-growth-gdp-growth-slows-to-6.1-percent-in-march-quarter/story/253394.html |title=Demonetisation effect: GDP growth slows down to 6.1% in March quarter |publisher=Businesstoday.in |date=1 June 2017 |access-date=26 June 2017}}</ref> The rate for the financial year 2016–17 was 7.1%, a reduction from the 8% in 2015–16.<ref>{{cite web|url=http://www.firstpost.com/business/demonetisation-impact-gdp-dips-sharply-in-jan-mar-quarter-to-6-1-manufacturing-mining-disappoints-3502487.html |title=Demonetisation impact: GDP dips sharply in Jan–Mar to 6.1%; India loses fastest growing tag |date=31 May 2017 |publisher=Firstpost.com |access-date=26 June 2017}}</ref> This drop was attributed to demonetisation by economists.<ref>{{cite web|url=https://in.news.yahoo.com/demonetisation-brings-gdp-down-6-060112447.html |title=Demonetisation brings GDP down to 6.1 per cent: Top economists stand vindicated |publisher=In.news.yahoo.com |date=1 June 2017 |access-date=26 June 2017}}</ref>

The GDP growth rate for Q1'17–18 dropped to 5.7%, compared to 7.9% a year prior,<ref>{{cite web|url=http://www.hindustantimes.com/business-news/economic-growth-slows-to-5-7-in-april-june-as-demonetisation-pain-lingers/story-yzvW9XdOUuzfWoWv5B5QTL.html |title=GDP growth rate down to 5.7% in April–June, demonetisation pain lingers &#124; business news |publisher=Hindustan Times |date= 31 August 2017|access-date=25 February 2018}}</ref> the lowest since March 2014. This drop was attributed to demonetisation as well as inventory drawdown by companies due to the forthcoming implementation of the Goods and Service Tax.<ref>{{Cite news|author=Press Trust of India |url=http://www.business-standard.com/article/economy-policy/india-paid-hefty-price-for-note-ban-5-7-gdp-growth-worrying-kaushik-basu-117090100584_1.html |title=India paid hefty price for note ban, 5.7% GDP growth worrying: Kaushik Basu &#124; Business Standard News |publisher=Business-standard.com |date=1 September 2017 |access-date=25 February 2018|newspaper=Business Standard India }}</ref><ref name="hindugdp"/> The GDP started to recover from 2017–18 and clocked 8.2% growth in 2018–19.<ref name="toi72"/><ref name="hindu74"/><ref>{{Cite news | url=https://economictimes.indiatimes.com/news/economy/indicators/indias-gdp-grows-at-8-2-per-cent-in-2018-19-q1/articleshow/65623967.cms | title=India's GDP grows at 8.2 per cent in 2018–19 Q1| newspaper=The Economic Times| date=31 August 2018}}</ref> The ''Hindustan Times'' in November 2021 reviewed GDP trends in the years following the demonitisation, and concluded that due to unpredented GDP contraction amid the COVID-19 pandemic and strong base effects, “the waters are now far too muddied to make any scientific assessment about demonetisation’s impact” on GDP.<ref>{{Cite news | url=https://www.hindustantimes.com/india-news/five-years-since-demonetisation-what-has-changed-101636310390379.html| title=Five years since demonetisation: What has changed?| author=Roshan Kishore| newspaper=The Hindustan Times| date=8 November 2021}}</ref>

===Employment===
{{Image frame |align=center|caption=Employed workforce<ref name="CMIE2"/><ref name="Tnnjob"/>|content=
{{Graph:Chart|width=400|height=100|xAxisTitle=Four monthly result|yAxisTitle= Employed people (in million)|type=line|x=Apr'16, Aug'16, Dec'16, Apr'17, Aug'17, Dec'17,Apr'18,Aug'18, Dec'18|y=401,403,406.5,405,,,401,398,|colors=#0000aa|xAxisAngle=-90}}}}
{{Image frame|align=center |caption=Monthly unemployment rate<ref name=UnemploymentCMIE /><ref>{{Cite web|url=https://www.macrotrends.net/countries/IND/india/unemployment-rate|title = India Unemployment Rate 1991-2021}}</ref>|content={{Graph:Chart|width=600|height=100|xAxisTitle=Monthly result|yAxisTitle= Unemployment Rate %)|type=line|x=Avg2015,Jan16,Feb16,Mar16,Apr16,May16,Jun16,Jul16,Aug16,Sep16,Oct16,Nov16,Dec16,Jan17,Feb17,Mar17,Apr17,May17,Jun17,Jul17,Aug17,Sep17,Oct17,Nov17,Dec17,Jan18,Feb18,Mar18,Apr18,May18,Jun18,Jul18,Aug18,Sep18,Oct18,Nov18,Dec18,Jan19,Feb19,Mar19,Apr19,May19,Jun19,Jul19,Aug19|y=5.6,8.7,8.5,8.7,8.9,9.7,8.9,8.5,9.6,8.4,6.7,6.5,6.4,5.9,5.0,4.7,3.9,4.0,4.1,3.4,4.1,4.6,5.0,4.7,4.7,5.0,5.9,6.0,5.6,5.1,5.8,5.7,6.3,6.5,6.8,6.7,7.0,6.9,7.2,6.7,7.3,7.0,7.9,7.3,8.2|colors=#0000aa|xAxisAngle=-90}} }}
Demonetisation caused a loss of jobs and a decline in wages, particularly in the unorganised and informal sector and as well as in small enterprises.<ref>{{cite web|url=https://scroll.in/article/827349/a-woman-construction-worker-in-jharkhand-lost-even-her-meagre-wages-in-10-weeks-since-demonetisation|title=Cashless and demonetised: Meet three Indians who once had jobs|first=Anumeha|last=Yadav|date=29 January 2017 }}</ref><ref>{{cite web|url=http://www.financialexpress.com/jobs/now-demonetisation-set-to-cost-400000-jobs/454305/|title=Now, Demonetisation set to cost 400,000 jobs|date=24 November 2016}}</ref><ref>{{cite web|url=https://thewire.in/economy/unprecedented-job-losses-wage-decline-unorganised-sector-post-demonetisation|title=Unprecedented Job Losses, Wage Decline in Unorganised Sector Post Demonetisation|website=The Wire}}</ref> Migrant workers were adversely affected by demonetisation.<ref>{{Cite news|url=http://www.caravanmagazine.in/vantage/demonetisation-migrant-labourers-kerala|title=How Demonetisation Is Affecting Migrant Labourers In Kerala|last=Maganti|first=Rahul|date=18 November 2016|work=The Caravan|access-date=24 August 2018}}</ref><ref>{{Cite news|url=https://www.business-standard.com/article/economy-policy/demonetisation-impact-migrant-workers-head-back-home-116120901022_1.html|title=Demonetisation impact: Migrant workers head back home|last=Dave|first=Sohini Das & Vimukt|date=10 December 2016|work=Business Standard India|access-date=25 August 2018}}</ref>

According to the report prepared by the [[Organization:Centre for Monitoring Indian Economy|Centre for Monitoring Indian Economy]] (CMIE), the number of employed people was 401 million in January–April 2016, 403 million during May–August 2016, and 406.5 million in September–December 2016. After demonetisation in November 2016, the number fell to 405 million in January–April 2017. So there was fall of 1.5 million in number of people employed.<ref name="Tnnjob">{{Cite news|url=https://www.timesnownews.com/business-economy/industry/article/demonetisation-effect-15-million-jobs-lost-in-first-4-months-of-the-year/65815|title=Demonetisation effect: 1.5 million jobs lost in first 4 months of the year|access-date=3 July 2018|language=en-GB}}</ref> CMIE also reported that the number of persons employed was 406.7 million in 2016–17 which fell by 0.1% to 406.2 million in 2017–18. So the employment had stagnated which resulted in employment rate decline. The employment rate fell from 42.59% in 2016–17 to 41.45% in 2016–17. The unemployment rate also declined from 7.51% in 2016–17 to 4.66% in 2017–18 because of the shrinking employed force. The number of the employed force fell from 439.7 million in 2016–17 to 426.1 million in 2017–18. CMIE attributed the impact to demonetisation as well as implementation of [[Finance:Goods and Services Tax (India)|Goods and Services Tax]] in July 2017.<ref name="CMIE2">{{Cite web|url=https://www.cmie.com/kommon/bin/sr.php?kall=warticle&dt=2018-07-17%2009:45:21&msec=123|title=Employment stagnates in 2017–18|last=Vyas|first=Mahesh|date=17 July 2018|website=CMIE|language=EN|archive-url=https://archive.today/20181019054555/https://www.cmie.com/kommon/bin/sr.php?kall=warticle&dt=2018-07-17%2009:45:21&msec=123|archive-date=19 October 2018|access-date=19 October 2018}}</ref><ref name=UnemploymentCMIE>{{cite web | url=https://unemploymentinindia.cmie.com/kommon/bin/sr.php?kall=wsttimeseries&index_code=050050000000&dtype=total | archive-url=https://web.archive.org/web/20181020063652/https://unemploymentinindia.cmie.com/kommon/bin/sr.php?kall=wsttimeseries&index_code=050050000000&dtype=total | url-status=dead | archive-date=20 October 2018 | title=Unemployment}}</ref>

It is estimated that 1.5 million jobs were lost, according to ''{{wipe|The Guardian}}''.<ref name="theguardian.com"/>

===Cost to banks===
Before demonetisation, the RBI had spent ₹34.21 billion to print banknotes in 2015–2016 (July to June). The cost of printing new banknotes rose to ₹79.65 billion in 2016–17 and ₹49.12 billion in 2017–18.<ref name="itoday1"/> This resulted in a decline in the dividend paid to the government from ₹658.76 billion in 2015–16 to ₹306.59 billion in 2016–17 and ₹500 billion in 2017–18.<ref name="itoday1"/><ref name=FirstPostDividend>{{cite web|url=http://www.firstpost.com/business/rbi-dividend-halves-to-rs-30659-cr-demonetisation-hero-turns-out-to-be-villain-for-narendra-modi-govt-3918167.html|title=RBI dividend halves to Rs 30,659 cr: Demonetisation hero turns out to be villain for Narendra Modi govt|date=11 August 2017|access-date=31 August 2017}}</ref><ref>{{cite web|url=http://www.hindustantimes.com/opinion/script-gone-wrong-rbi-takes-demonetisation-hit-cuts-dividend-to-govt-by-more-than-half/story-y8lXWKpupQecLnTA9AwSjJ.html|title=Script gone wrong: RBI takes demonetisation hit and government gets a cut|date=11 August 2017|access-date=31 August 2017}}</ref> It was estimated that this decrease in income for the government could cause the fiscal deficit for the financial year 2016–17 to increase from the targeted 3.2% to 3.4%.<ref name=YahooDividend>{{cite web|url=https://in.news.yahoo.com/half-dividend-full-fallacy-rbi-154100516.html|title=Half dividend, full fallacy: RBI implies Modi & Urjit Patel got demonetisation wrong|access-date=31 August 2017|archive-url=https://web.archive.org/web/20170822220750/https://in.news.yahoo.com/half-dividend-full-fallacy-rbi-154100516.html|archive-date=22 August 2017|url-status=dead}}</ref> The {{wipe|Indian Air Force}} was paid ₹294.1 million to move banknotes after demonetisation.<ref>{{cite web | url=https://english.manoramaonline.com/news/nation/2018/07/08/iaf-charged-ferry-currency-notes-post-demonetisation.html | title=IAF charged Rs 29.41cr to ferry currency notes post-demonetisation}}</ref>

The banks incurred the cost in collection, storage, and movement of banknotes across the country, as well as the cost of re-calibrating ATMs for the new banknotes (as they differed in size from the old ones).<ref>{{cite web | url=https://indianexpress.com/article/opinion/columns/rbi-demonetisation-bad-loans-economy-5357208/ | title=About false promises| date=14 September 2018}}</ref>

=== Welfare schemes ===
Demonetisation negatively impacted the Midday Meal Scheme due to the shortage of funds.<ref>{{Cite news|url=https://www.thehindu.com/todays-paper/tp-national/tp-telangana/Midday-meal-workers-hit-by-demonetisation/article16740823.ece|title=Midday meal workers hit by demonetisation|last=Dayashankar|first=K. m|date=2 December 2016|work=The Hindu|access-date=24 August 2018|language=en-IN|issn=0971-751X}}</ref><ref>{{Cite web|url=https://cms.deccanherald.com/content/589551/demonetisation-hits-mid-day-meal.html|title=Demonetisation hits mid-day meal scheme too|date=3 January 2017|website=Deccan Herald|language=en|access-date=24 August 2018}}{{Dead link|date=April 2019 |bot=InternetArchiveBot |fix-attempted=yes }}</ref><ref>{{Cite web|url=https://thewire.in/uncategorised/costs-demonetisation-tribals-schools|title=The Costs of Demonetisation: Farm Economy Takes a Hit, Mid-Day Meal Scheme in Peril|website=The Wire|access-date=24 August 2018}}</ref>

=== Deaths due to demonetisation ===
Several people were reported to have died from standing in queues for hours to exchange their demonetised banknotes.<ref>{{cite web|url=http://indiatoday.intoday.in/story/demonetosation-deaths-congress-modi-government/1/808721.html|title=Demonetisation: Rush for cash kills 2 in Kerala, 1 in Maharashtra; Congress blames Modi government|work=India Today}}</ref><ref>{{cite news|url=http://www.uniindia.com/demonetisation-96-year-old-died-while-standing-in-queue/states/news/684631.html|title=Demonetisation: 96 year-old died while standing in queue|agency=United News of India|date=12 November 2016}}</ref><ref>{{cite news|title=Three People Die While Waiting in Queue To Exchange Rs 500 and Rs 1,000 Currency Notes|url=http://www.huffingtonpost.in/2016/11/11/73-year-old-dies-waiting-in-queue-to-exchange-discontinued-curre/|work=Huffington Post India|date=11 November 2016|access-date=13 November 2016|archive-url=https://web.archive.org/web/20161113002732/http://www.huffingtonpost.in/2016/11/11/73-year-old-dies-waiting-in-queue-to-exchange-discontinued-curre/|archive-date=13 November 2016|url-status=dead}}</ref> Deaths were also attributed to lack of medical help due to refusal of demonetised banknotes by hospitals.<ref>{{cite news|title=Mumbai: Baby dies waiting for medical help as hospital refuses Rs 500 & 1000 currency notes|url=http://www.india.com/news/india/mumbai-baby-dies-waiting-for-medical-help-as-hospital-refuses-rs-500-1000-currency-notes-1642581/|access-date=13 November 2016|publisher=India.com|date=12 November 2016}}</ref><ref>{{cite web|url=http://mumbaimirror.indiatimes.com/mumbai/cover-story/Doc-says-no-to-deposit-in-Rs-500-notes-baby-dies-awaiting-help/articleshow/55380976.cms|title=Doc says no to deposit in Rs 500 notes, baby dies awaiting help |work=Mumbai Mirror}}</ref><ref>{{cite web|author=Sadaguru Pandit|newspaper=Hindustan Times|url=http://www.hindustantimes.com/india-news/baby-dies-after-doctor-refuses-to-take-rs-500-and-rs-1000-notes-for-treatment-in-mumbai/story-xxSBtmK39xdcAx0hfhViEL.html|title=Infant's death: Doc booked over claims of refusing treatment in Mumbai|date=12 November 2016}}</ref> In one month after the demonetisation was announced, 82 people died according to a detailed list compiled by Catch News.<ref>{{cite news |last1=Staff |first1=The Wire |title=The Costs of Demonetisation: Death Toll Rises to 82, Eight Million Workers Remain Unpaid |url=https://thewire.in/uncategorised/the-costs-of-demonetisation-death-toll-rises-to-82-eight-million-bidi-workers-remain-unpaid |access-date=2023-01-02 |work=The Wire (India) |date=2016-12-02}}</ref> By the end of December 2016, political opposition leaders claimed that over 100 people had died due to demonetisation.<ref>{{cite web|url=http://www.dnaindia.com/india/report-demonetization-government-not-mourning-over-100-deaths-due-to-cash-crunch-says-opposition-2280902|title=Demonetization: Government not mourning over 100 deaths due to cash-crunch, says Opposition|date=8 December 2016}}</ref><ref>{{Cite news|url=http://www.business-standard.com/article/news-ians/mamata-attacks-modi-over-cash-withdrawal-limit-demonetisation-deaths-116123100489_1.html|title=Mamata attacks Modi over cash withdrawal limit, demonetisation deaths|last=IANS|date=31 December 2016|via=Business Standard|newspaper=Business Standard India}}</ref><ref>{{cite web|url=http://www.hindustantimes.com/india-news/around-105-died-but-twitter-king-modi-didn-t-mention-it-lalu-on-demonetisation/story-XGSe6LlYLiKdTBoBBL4zJL.html|title=Around 105 died, but 'Twitter king' Modi didn't mention it: Lalu on demonetisation|date=22 December 2016|publisher=Indo-Asian News Service}}</ref> In March 2017, the government stated that they received no official report on deaths connected to demonetisation.<ref>{{cite web|url=http://www.newindianexpress.com/nation/2017/mar/17/no-official-report-on-deaths-due-to-demonetisation-government-1582474.html |title=No official report on deaths due to demonetisation: Government |publisher=The New Indian Express |date=17 March 2017 |access-date=26 June 2017}}</ref> Later in December 2018, the then Finance Minister Arun Jaitley reported in parliament that four people, three bank personnel and one customer of the State Bank of India, died during demonetisation.<ref>{{cite web|url=https://www.oneindia.com/india/after-two-years-of-denial-govt-admits-death-due-to-demonetisation-2824960.html|title=After two years of denial, govt admits death due to demonetisation|first=Deepika|last=S|date=19 December 2018|website=One India}}</ref>

==Legal issues==
M. Seeni Ahamed, General Secretary of the Indian National League, filed a public interest litigation (PIL) to scrap the decision of demonetisation. The High Court dismissed the PIL, stating that it could not interfere in monetary policies of the government.<ref>{{Cite news|url=http://economictimes.indiatimes.com/articleshow/55353472.cms |title=Govt's demonetisation move fit for country's security, development: HC |newspaper= The Economic Times |date=10 November 2016 |access-date=10 November 2016}}</ref> Similar PILs were also filed in the Supreme Court of India.<ref>{{cite web|url=http://indiatoday.intoday.in/story/pils-supreme-court-rs-500-rs-1000-notes-illegal/1/807124.html |title=PILs in Supreme Court against making Rs 500, Rs 1000 notes illegal |work=India Today |date=10 November 2016 |access-date=10 November 2016}}</ref> In November 2017, the Supreme Court of India referred all cases which have similarity to demonetisation to constitutional bench to review the legality of the demonetisation, implementation irregularities and violation of people's rights by limits on cash withdrawals.<ref>{{cite web | url=https://www.livemint.com/Politics/i2HFNZCdECO3Hn1qqXpyLI/SC-refers-individual-cases-against-demonetisation-to-constit.html | title=SC refers individual cases against demonetisation to constitution bench| date=3 November 2017}}</ref>

The government had initially announced that any person who was unable to deposit the demonetised banknotes by 31 December 2016 would be given an opportunity to do so until a later date.<ref name="withdrawaloflegal" /> However, the government allowed only Non-Resident Indians (NRIs) to deposit demonetised banknotes after 31 December 2016.<ref>{{cite web|url=http://www.tribuneindia.com/news/nation/rbi-turns-away-people-wanting-to-exchange-old-notes/345392.html |title=RBI turns away people wanting to exchange old notes |publisher=Tribuneindia.com |date=3 January 2017 |access-date=26 June 2017}}</ref> As a result, many people were left stranded with demonetised banknotes. People petitioned the courts to allow a deposit of the demonetised banknotes.<ref>{{cite web|last=Nanjappa |first=Vicky |url=http://www.oneindia.com/india/unable-deposit-demonetised-currency-in-rbi-1000-approach-supreme-court-2391049.html |title=Unable to deposit demonetised currency in RBI, 1,000s to approach Supreme Court |work=Oneindia |date=1 April 2017 |access-date=26 June 2017}}</ref> In November 2017, the Supreme Court dismissed 14 petitions related to demonetisation, and asked petitioners to file pleas with a constitutional bench which would deal with cases related to demonetisation.<ref>{{cite news|url=https://indianexpress.com/article/india/sc-disposes-of-petitions-seeking-fresh-chance-to-deposit-old-notes-4921749/lite/|title=SC disposes of petitions seeking fresh chance to deposit old notes|date=4 November 2017|work=Indian Express}}</ref>

In a 4:1 majority judgement in January 2023, the Supreme Court of India refused to strike down the demonetisation decision of 2016 on the basis of proportionality, saying that the process followed by the government to take the action was not flawed, even if the move did not achieve its objectives.<ref>{{cite news |author=Scroll Staff |title=Supreme Court upholds demonetisation by 4:1 majority |url=https://scroll.in/latest/1040990/demonetisation-cannot-be-struck-down-says-supreme-court |access-date=2023-01-02 |work=Scroll.in |date=2023-01-02}}</ref><ref>{{cite news |title=Demonetisation is valid, says SC in 4:1 majority judgment; Justice Nagarathna dissents |url=https://www.thehindu.com/news/national/sc-demonetisation-verdict/article66329113.ece |access-date=28 May 2023 |work=The Hindu |date=2 January 2023 |language=en-IN}}</ref><ref>{{cite news |title=Supreme Court upholds demonetisation: What was the challenge about? |url=https://indianexpress.com/article/explained/supreme-court-upholds-demonetisation-what-was-the-challenge-about-8356303/ |access-date=28 May 2023 |work=The Indian Express |date=2 January 2023 |language=en}}</ref> The dissenting judgement said that the procedure of notification of demonetisation by the government was unlawful, while agreeing with the majority decision that the government has the authority to take such a decision, regardless of the validity of the reasons for the decision.<ref>{{cite news |last1=Mandhani |first1=Apoorva |title=Justice Nagarathna's dissent in demonetisation case — 'well-intentioned but unlawful' |url=https://theprint.in/judiciary/justice-nagarathnas-dissent-in-demonetisation-case-well-intentioned-but-unlawful/1294347/ |access-date=28 May 2023 |work=ThePrint |date=2 January 2023}}</ref>

== Reactions ==
===Reactions of economists===
Most economists across the ideological spectrum, except those considered partisan, were broadly critical of the demonetisation as an economic policy.<ref name="voxdev">{{Cite news|url=https://voxdev.org/topic/institutions-political-economy/economic-and-political-consequences-india-s-demonetisation|title=The economic and political consequences of India's demonetisation|last1=Banerjee|first1=Abhijit|date=21 June 2017|work=VoxDev|access-date=3 November 2018|last2=Kala|first2=Namrata|language=en}}</ref>

Nobel laureate Amartya Sen, called the demonetisation a "despotic action" and said that it "undermines notes, it undermines bank accounts, it undermines the entire economy of trust."<ref>{{Cite news|url=https://www.thehindu.com/todays-paper/tp-national/demonetisation-effects-will-last-long/article17370434.ece|title=Demonetisation effects will last long|date=26 February 2017|work=The Hindu|access-date=26 February 2017|language=en}}</ref><ref>{{Cite news|url=https://www.thehindu.com/news/national/Amartya-Sen-terms-demonetisation-a-despotic-action/article16730675.ece|title=Amartya Sen terms demonetisation a despotic action|last=PTI|newspaper=The Hindu|date=30 November 2016}}</ref><ref>{{cite web|url=https://www.india.com/news/india/amartya-sen-criticises-demonetisation-drive-says-narendra-modi-declared-all-indians-crook-1665167/|title=Amartya Sen criticises demonetisation drive, says Narendra Modi declared all Indians 'crook'|first=India.com News|last=Desk|date=26 November 2016}}</ref> Former senior vice-president and chief economist of the World Bank Kaushik Basu, called it a "major mistake" and said that the "damage" is likely to be much greater than any possible benefits.<ref name="Business Standard">{{Cite news|url=https://www.business-standard.com/article/economy-policy/demonetisation-damage-greater-than-its-benefits-says-kaushik-basu-116111101733_1.html |title=Demonetisation damage greater than its benefits, says Kaushik Basu |work=Business Standard |date=12 November 2016 |access-date=12 November 2016|last1=Roychoudhury |first1=Arup }}</ref><ref>{{Cite news|author=PTI |url=https://economictimes.indiatimes.com/news/economy/policy/gst-good-economics-demonetisation-is-not-kaushik-basu/articleshow/55375545.cms |title=GST good economics; demonetisation is not: Kaushik Basu |newspaper=The Economic Times |date=11 November 2016 |access-date=12 November 2016}}</ref><ref>{{Cite news|url=https://www.nytimes.com/2016/11/27/opinion/in-india-black-money-makes-for-bad-policy.html|title=In India, Black Money Makes for Bad Policy|date=27 November 2016|newspaper=The New York Times|last1=Basu|first1=Kaushik}}</ref> Pronab Sen, former Chief Statistician and Planning Commission of India member, called it a "hollow move" since it did not really address any of the purported goals of tackling black money or fake currency.<ref>{{cite web|url=https://www.livemint.com/Opinion/uzvIE84KGXy1xvp06pTazM/Demonetization-is-a-hollow-move.html|title=Demonetization is a hollow move|first=Pronab|last=Sen|date=14 November 2016}}</ref> Prabhat Patnaik, a former professor of economics at the Jawaharlal Nehru University, Delhi called the move 'witless' and 'anti-people'. He criticised the assumption that black money was "a hoard of cash", saying that it would have little effect in eliminating "black activities" and would "caus[e] much hardship to common people."<ref>{{cite news|last1=Patnaik|first1=Prabhat|title=Demonetization: Witless and Anti-People|url=https://www.thecitizen.in/index.php/NewsDetail/index/1/9151/Demonetization-Witless-and-Anti-People|access-date=13 November 2016|work=The Citizen|date=9 November 2016|archive-date=19 November 2016|archive-url=https://web.archive.org/web/20161119141220/https://www.thecitizen.in/index.php/NewsDetail/index/1/9151/Demonetization-Witless-and-Anti-People|url-status=dead}}</ref> [[Organization:Columbia University|Columbia University]] economist Jagdish Bhagwati, however, praised the demonetisation, calling it “a courageous and substantive economic reform that, despite the significant transition costs, has the potential to generate large future benefits.”<ref>{{cite web|url=https://timesofindia.indiatimes.com/blogs/toi-edit-page/war-on-black-money-demonetisation-is-a-courageous-reform-that-will-bring-substantive-benefits/|title=War on black money: Demonetisation is a courageous reform that will bring substantive benefits|publisher=The Indian Express |date=14 December 2016 |access-date=31 October 2022}}</ref>

Nobel laureate [[Biography:Richard Thaler|Richard Thaler]], initially, praised the demonetisation of larger currency notes as "a policy I have long supported, First step towards cashless and good start on reducing corruption.", but was befuddled with the introduction of even bigger Rs.2000 banknote later on.<ref>{{cite news|url=https://www.businesstoday.in/latest/economy-politics/story/nobel-prize-economics-winner-richard-thaler-pm-narendra-modi-demonetisation-rs2000-92073-2017-10-10|title=Nobel winner Richar Thaler applauded PM Narendra Modi's demonetisation; did not favour Rs 2000 note|date=10 October 2017|publisher=Business Today}}</ref> Economist and journalist T. N. Ninan wrote in the Business Standard that demonetisation 'looks like a bad idea, badly executed on the basis of some half-baked notions'.<ref>{{Cite news|url=https://www.business-standard.com/article/opinion/t-n-ninan-four-weeks-later-116120201131_1.html|title=T N Ninan: Four weeks later|first=T. N.|last=Ninan|date=2 December 2016|via=Business Standard|newspaper=Business Standard India}}</ref> Steve Forbes described the move as "sickening and immoral."<ref name="forbes">{{cite web|url=https://www.forbes.com/sites/steveforbes/2016/12/22/what-india-has-done-to-its-money-is-sickening-and-immoral/|title=What India Has Done To Its Money Is Sickening And Immoral|first=Steve|last=Forbes|website={{wipe|Forbes}}}}</ref> Forbes wrote that "[w]hat India has done is commit a massive theft of people's property without even the pretense of due process—a shocking move for a democratically elected government."<ref name="forbes" /> Nobel laureate [[Biography:Paul Krugman|Paul Krugman]] opined that it was difficult to see gains from demonetisation, while there might be significant costs to it.<ref>{{cite web|url=https://www.hindustantimes.com/india-news/htls-2016-demonetisation-gains-uncertain-says-noble-laureate-paul-krugman/story-dFszJMERsydirqemQXcZ7L.html|title=HTLS 2016: Demonetisation gains uncertain, says Nobel laureate Paul Krugman|date=2 December 2016}}</ref>

Economic analyst Vivek Kaul stated in a BBC article that "demonetisation had been a failure of epic proportions."<ref name="BBCdemonetisationFail">{{Cite news|url=https://www.bbc.com/news/world-asia-india-41100613|title=India rupee: Illegal cash crackdown failed – bank report|date=30 August 2017|access-date=31 August 2017|work=BBC News}}</ref> Jayati Ghosh, C. P. Chandrasekhar and Prabhat Patnaik wrote that demonetisation was unnecessary and unsuccessful, while it damaged the economy and adversely affected the lives and rights of the Indian people.<ref name="decoded">{{cite book |last1=Ghosh |first1=Jayati |last2=Chandrasekhar |first2=C. P. |last3=Patnaik |first3=Prabhat |title=Demonetisation Decoded: A Critique of India's Currency Experiment |date=16 March 2017 |publisher=Taylor & Francis |isbn=978-1-351-66401-1 |url=https://books.google.com/books?id=whRdDgAAQBAJ |access-date=24 October 2023 |language=en}}</ref>

===Reactions of industrialists===
The decision met with mixed initial reactions. Several bankers like Arundhati Bhattacharya (Former Chairperson of State Bank of India) and Chanda Kochhar (MD & CEO of [[Company:ICICI Bank|ICICI Bank]]) favored the demonitisation in order to curb black money.<ref name="IndiaInc">{{cite web | url=https://indianexpress.com/article/business/economy/narendra-modi-rs-500-1000-sbi-arundhati-bhattacharya-icici-chanda-kochhar-here-is-how-india-inc-reacted-4364818/ | title=Govt demonitises Rs 500, 1000 notes: Here is how India Inc reacted | work=The Indian Express | date=8 November 2016 | access-date=9 November 2016}}</ref> Businessmen Anand Mahindra (Mahindra Group), Sajjan Jindal (JSW Group), Kunal Bahl ([[Company:Snapdeal|Snapdeal]] and FreeCharge) also supported the move, adding that it would also accelerate e-commerce.<ref name="IndiaInc" /> Infosys founder N. R. Narayana Murthy praised the move.<ref>{{Cite news|url=https://economictimes.indiatimes.com/news/politics-and-nation/demonetisation-we-should-all-be-celebrating-says-narayana-murthy/articleshow/55357977.cms|title=Demonetisation: We should all be celebrating, says Narayana Murthy |newspaper=The Economic Times|date=10 November 2016 }}</ref><ref>{{cite web|url=https://indianexpress.com/article/business/banking-and-finance/move-to-withdraw-rs-500-1000-notes-master-stroke-narayana-murthy-4365782/|title=Move to withdraw Rs 500, 1,000 notes masterstroke |author=Narayana Murthy|date=9 November 2016}}</ref>

Deepak Parekh (Chairman of HDFC) had initially appreciated the decision of demonetisation, but later said that the move had derailed the economy, and expressed skepticism about its outcome.<ref>{{cite web|url=https://www.financialexpress.com/economy/hdfc-chairman-deepak-parekh-hits-out-at-demonetisation-drive-says-it-derailed-economy/467791/|title=HDFC Chairman Deepak Parekh hits out at demonetisation drive, says it derailed economy|date=8 December 2016}}</ref><ref>{{cite web|url=https://www.firstpost.com/business/hdfcs-deepak-parekh-says-economy-has-derailed-in-short-term-due-to-demonetisation-3145486.html|title=HDFC's Deepak Parekh says economy has derailed in short term due to demonetisation|date=8 December 2016}}</ref> Industrialist Rajiv Bajaj criticised demonetisation, saying that not just the execution, but the concept of demonetisation was wrong in itself.<ref>{{cite web|url=https://indianexpress.com/article/business/economy/demonetisation-idea-wrong-dont-blame-its-execution-rajiv-bajaj-4529180/|title=Demonetisation idea wrong, don't blame its execution: Rajiv Bajaj|date=17 February 2017}}</ref>

===Political reactions===
[[Social:Indian National Congress|Indian National Congress]] spokesperson Randeep Surjewala welcomed the move but remained skeptical on the consequences that would follow.<ref name="Cong">{{cite web | url=https://www.india.com/news/india/rs-500-1000-currency-notes-banned-congress-raises-questions-against-narendra-modi-govts-shocking-move-1636286/ | title=Rs 500 & 1000 currency notes banned: Congress raises questions against Narendra Modi govt's shocking move | publisher=India.com | date=8 November 2016 | access-date=9 November 2016}}</ref> Chief Minister of Bihar Nitish Kumar supported the move.<ref>{{Cite news|url=https://www.thehindu.com/news/national/nitish-backs-modi-on-demonetisation/article9323442.ece|title=Nitish welcomes demonetisation move|date=9 November 2016|newspaper=The Hindu}}</ref><ref>{{cite news|url=https://timesofindia.indiatimes.com/india/Nitish-Kumar-supports-Modis-demonetisation-move/articleshow/55336788.cms|title=Nitish Kumar supports Modi's demonetisation move |work=The Times of India|date=9 November 2016 }}</ref><ref>{{cite web|url=https://indianexpress.com/article/india/india-news-india/bihar-cm-nitish-supports-decision-to-withdraw-demonetisation-currency-rs-1000-rs-500-notes-4366034/|title=Bihar CM Nitish Kumar supports decision to withdraw Rs 1000, Rs 500 notes|date=9 November 2016|work=Indian Express}}</ref> The demonetisation also got support from the then Chief Minister of Andhra Pradesh Nara Chandrababu Naidu.<ref>{{Cite news|url=https://www.thehindu.com/news/national/demonitisation-of-rs-500-rs-1000-notes-naidu-had-inkling-of-the-ban/article9320914.ece|title=Demonetisation of Rs. 500, Rs. 1000 notes: Naidu had inkling of the ban?|first=K.|last=Venkateshwarlu|date=9 November 2016|newspaper=The Hindu}}</ref><ref>{{Cite news|url=https://www.business-standard.com/article/economy-policy/andhra-cm-naidu-asked-for-demonitisation-of-rs-500-rs-1-000-notes-in-october-116110900626_1.html|title=Andhra CM Naidu asked for demonetisation of Rs 500, Rs 1,000 notes in October|first=B. S.|last=Reporter|date=9 November 2016|via=Business Standard|newspaper=Business Standard India}}</ref><ref>{{Cite web|url=https://www.newindianexpress.com/states/andhra-pradesh/2016/nov/08/chandrababu-naidu-welcomes-demonetisation-move-1536401.html|title=Chandrababu Naidu welcomes demonetisation move|website=The New Indian Express}}</ref> Former Chief Election Commissioner of India S. Y. Quraishi said demonetisation could lead to long term electoral reforms.<ref>{{cite web|url=https://www.hindustantimes.com/analysis/demonetisation-could-lead-to-long-pending-electoral-reforms/story-tXYgT7hw6Q3TQUbPuIUucO.html|title=Demonetisation could lead to long-pending electoral reforms|date=11 November 2016}}</ref> Indian social activist Anna Hazare hailed demonetisation as a "revolutionary step".<ref>{{Cite news|url=https://economictimes.indiatimes.com/news/politics-and-nation/anna-hazare-hails-demonetisation-calls-it-revolutionary-step/articleshow/55354898.cms|title=Anna Hazare hails demonetisation, calls it 'revolutionary' step |newspaper=The Economic Times|date=10 November 2016 }}</ref><ref>{{cite web|url=https://indianexpress.com/article/india/india-news-india/demonitisation-a-revolutionary-step-to-fight-corruption-anna-hazare-4367070/|title=Demonetisation a revolutionary step to fight corruption: Anna Hazare|date=10 November 2016}}</ref><ref>{{Cite web|url=https://www.ndtv.com/india-news/notes-ban-anna-hazare-hails-pm-narendra-modis-revolutionary-step-kejriwal-criticizes-it-1623922|title=Notes Ban: Anna Hazare Hails PM Narendra Modi's 'Revolutionary' Step, Kejriwal Criticizes It|website=NDTV.com}}</ref> Former President of India Pranab Mukherjee welcomed the demonetisation move by calling it a "bold step".<ref>{{cite web|url=https://zeenews.india.com/news/india/president-pranab-mukherjee-welcomes-demonetisation-of-rs-1000-and-rs-500-notes_1947632.html|title=President Pranab Mukherjee welcomes demonetisation of Rs 1,000 and Rs 500 notes|date=8 November 2016|publisher=india.com}}</ref><ref>{{cite web|url=https://indianexpress.com/article/india/india-news-india/demonetisation-of-rs-1000-and-rs-500-notes-bold-step-president-pranab-mukherjee-4364815/|title=Demonetisation of Rs 1,000 and Rs 500 notes bold step: President Pranab Mukherjee|date=8 November 2016|work=The Indian Express}}</ref><ref>{{Cite news|url=https://www.thehindu.com/news/national/demonetisation-of-rs-500-rs-1000-notes-a-bold-step-says-pranab-mukherjee/article9320915.ece|title=A bold step, says Pranab Mukherjee|date=9 November 2016|newspaper=The Hindu}}</ref> Chief Ministers of several Indian states like Mamata Banerjee,<ref>{{Cite web|url=https://www.ndtv.com/india-news/one-month-of-pain-and-harrassment-pm-must-clarify-mamata-banerjee-1635504|title=One Month Of Pain And Harassment, PM Must Clarify: Mamata Banerjee|website=NDTV.com}}</ref> Arvind Kejriwal<ref>{{Cite news|url=https://www.business-standard.com/article/news-ani/demonetization-is-nothing-but-a-big-bjp-scam-kejriwal-116111200849_1.html|title=Demonetization is nothing but a big BJP scam: Kejriwal|last=ANI|date=12 November 2016|via=Business Standard|newspaper=Business Standard India}}</ref> and Pinarayi Vijayan<ref>{{cite web|url=https://www.dnaindia.com/india/report-kerala-cm-pinarayi-vijayan-ministers-on-dharna-say-demonetisation-destroying-cooperative-sector-2274629|title=Kerala CM Pinarayi Vijayan, ministers stage dharna outside RBI office – Latest News & Updates at Daily News & Analysis|date=18 November 2016}}</ref> have criticised and led major protests against the decision in their states and in parliament. Initially, the move to demonetise and try to hinder black money was appreciated, but the manner in which it was carried out by causing hardships to common people was criticised.<ref>{{cite web|url=https://www.bloombergquint.com/opinion/2016/11/11/dear-pm-modi-demonetisation-brahmastra-could-have-spared-the-poor|title=Dear PM Modi, Demonetisation 'Brahmastra' Could Have Spared The Poor|date=8 November 2016|publisher=Bloomberg Quint|author=Raghav Bahl|access-date=12 November 2016}}</ref>

A Parliamentary panel report in April 2017 stated that rural households and "honest taxpayers" were the worst hit by demonetisation.<ref>{{cite web|url=https://www.moneycontrol.com/news/business/economy/honest-taxpayers-rural-household-hardest-hit-due-to-demonetisation-parliamentary-panel-2256385.html|title=Honest taxpayers, rural household hardest hit due to demonetisation: Parliamentary Panel|date=11 April 2017|publisher=Moneycontrol.com|access-date=25 April 2017}}</ref> It said that it was not just the poor that suffered, but the manufacturing sector was impacted too.<ref>{{cite web|url=https://www.financialexpress.com/india-news/demonetisation-rural-household-honest-taxpayers-worst-due-to-the-step-says-parliamentary-committee/623835/|title=Demonetisation: Rural household, honest taxpayers worst due to the step, says Parliamentary committee|author=Jjayesh shanrilal|date=11 April 2017|publisher=The Financial Express|access-date=25 April 2017}}</ref> According to the panel, demonetisation created significant disruption throughout economy, because it was carried out without prior study or research.<ref>{{cite web|url=https://www.newindianexpress.com/business/demonetisation/2017/apr/10/demonetisation-created-significant-disruption-throughout-economy-parliamentary-panel-1592129.html|title=Demonetisation created significant disruption throughout economy: Panel|publisher=The New Indian Express|access-date=25 April 2017}}</ref><ref>{{cite web|url=https://164.100.47.5/committee_web/ReportFile/12/96/233_2018_6_15.pdf|title=Committee report}}</ref>
An [[Social:Indian National Congress|Indian National Congress]] led opposition which includes 13 political parties, opposed the government on the issue of demonetisation in the Winter Session of the Indian Parliament.<ref>{{cite web|url=https://www.dnaindia.com/india/report-demonetization-debate-likely-to-hot-up-winter-session-didi-to-knock-on-president-s-door-2273770|title= Debate on demonetisation, in winter session|work=DNA India.com|date=15 November 2016}}</ref><ref>{{Cite news|url=https://www.business-standard.com/article/current-affairs/winter-session-oppn-to-target-govt-on-demonetisation-orop-gst-116111401558_1.html|title=Opposition to target government on demonetisation|work=Business Standard|date=15 November 2016}}</ref><ref>{{cite news|url=https://economictimes.indiatimes.com/news/politics-and-nation/opposition-parties-agree-to-raise-notes-issue-in-session/articleshow/55424453.cms|title= Parties agree to raise notes issue in session|work=The Economic Times|date=15 November 2016}}</ref>

On 16 November 2016, Mamata Banerjee led a delegation comprising political parties of Trinamool Congress, Aam Aadmi Party, BJP ally [[Religion:Shiv Sena|Shiv Sena]] and National Conference to Rashtrapati Bhawan to protest against the demonetisation. A memorandum was submitted to the President of India Pranab Mukherjee demanding rollback of the decision.<ref>{{cite web|url=https://indianexpress.com/article/india/india-news-india/demonetisation-of-rs-500-rs-1000-notes-mamata-banerjee-leads-protest-march-to-rashtrapati-bhavan-4379517/|title=Demonetisation of Rs 500, Rs 1000 notes: Mamata Banerjee leads protest march to Rashtrapati Bhavan|publisher=The Indian Express|access-date=17 November 2016|date=16 November 2016}}</ref><ref name="Aljazeera-1">{{cite web|url=https://www.aljazeera.com/news/2016/11/india-demonetisation-takes-toll-poor-161116172745225.html|title=India: Demonetisation takes its toll on the poor|date=16 November 2016|publisher=Al Jazeera|access-date=17 November 2016}}</ref>

Prem Chand Gupta, a member of the Rashtriya Janata Dal, questioned a statement of Modi from the unscheduled TV broadcast on 8 November, "If it was planned 10 months ago, how did RBI Governor Urjit Patel sign on new note?". Praful Patel, a member of the Nationalist Congress Party, stated that "the government was not even prepared to recalibrate the ATMs while announcing the move. People's suffering are unimaginable. Nobody is questioning the government's intention, but you are unprepared to execute the move". Later, the former Chief Minister of Uttar Pradesh Mayawati called the situation "a financial emergency", saying, "It looks as if ''{{wipe|India}}'' has shut down." Also, Sitaram Yechury from the Communist Party of India, questioned the government on the demonetisation move by stating "only 6% of black money in India is in cash to drive his point that demonetisation won't curb illicit wealth."<ref>{{Cite news|url=https://www.thehindu.com/news/national/live-parliament-proceedings-november-16-2016/article9351846.ece|title=As it happened: Parliament proceedings — November 16, 2016 |newspaper=The Hindu|access-date=16 November 2016|date=16 November 2016 |last1=Desk |first1=Internet }}</ref>

On 17 November 2016, Chief Minister of Delhi Arvind Kejriwal and his West Bengal counterpart Mamata Banerjee led a rally against demonetisation at Azadpur Mandi, the biggest vegetable and fruits wholesale market in [[Place:New Delhi|New Delhi]].<ref>{{cite web|url=https://www.hindustantimes.com/india-news/live-kejriwal-mamata-protest-against-demonetisation-at-azadpur-market/story-9s1OoTJ1XgN6fFXSD6x36I.html|title=Resolve cash crunch in 3 days or face rebellion: Mamata, Kejriwal to Govt|publisher=Hindustan Times|access-date=17 November 2016|date=17 November 2016}}</ref>

On 24 November 2016, former prime minister Manmohan Singh said "this scheme will hurt small industries, the farming sector. The GDP can decline by about 3 percent due to this move". He called the demonetisation an "organised loot, legalised plunder of the common people".<ref>{{Cite news | url=https://economictimes.indiatimes.com/news/politics-and-nation/is-modi-proving-manmohan-singh-right-with-slew-of-u-turns-on-cash-ban/articleshow/55632062.cms | title=Is Modi proving Manmohan Singh right with slew of U-turns on cash ban?| newspaper=The Economic Times| date=26 November 2016}}</ref><ref>{{Cite news|url=https://www.thehindu.com/news/national/Both-Houses-adjourned-PM-absent/article16692735.ece|title=Parliament Proceedings – Both Houses adjourned; PM absent|access-date=24 November 2016|newspaper=The Hindu|date=24 November 2016|last1=Vasudeva|first1=Vikas|last2=Pathak|first2=Vikas}}</ref>

Strikes were organised across India. Opposition parties like the [[Social:Indian National Congress|Indian National Congress]], Bahujan Samaj Party, Trinamool Congress,<ref>{{cite web|url=https://www.ndtv.com/india-news/oppositions-countrywide-protest-over-notes-ban-on-monday-next-1629159?site=full|title=Oppositions will protest|date=23 November 2016|work=ndtv.com}}</ref> DMK, JD(U), AIADMK, Nationalist Congress Party, Left, Rashtriya Janata Dal and the Samajwadi Party<ref>{{cite web|url=https://www.hindustantimes.com/india-news/demonetisation-drive-opposition-to-observe-aakrosh-diwas-on-nov-28/story-KZ9hMDXjWeXpg3n1z4ZFwN.html|title=Akrosh Diwas|date=23 November 2016|work=Hindustan times}}</ref> decided to observe 'Akrosh Diwas' as, a protest campaign day on 28 November <ref>{{cite web|url=https://www.telegraphindia.com/1161124/jsp/nation/story_121022.jsp|archive-url=https://web.archive.org/web/20161124154609/http://www.telegraphindia.com/1161124/jsp/nation/story_121022.jsp|url-status=dead|archive-date=24 November 2016|title=Opposition stands together|date=23 November 2016|work=Telegraph India, Calcutta}}</ref><ref>{{cite web|url=https://indianexpress.com/article/india/politics/demonetisation-cpim-to-observe-november-28-as-akrosh-diwas-4391889/|title=CPI(M), 28 November as Akrosh Diwas|date=23 November 2016|work=Indian Express}}</ref> and launch protests in front of banks, demanding that money be returned to people.<ref>{{cite web|url=https://www.hindustantimes.com/india-news/pm-modi-attends-lok-sabha-but-no-progress-in-demonetisation-debate-with-oppn/story-kqCXDAyBe30aWZIlYhZOaO.html|title=November 28, Akrosh Diwas by opposition|date=23 November 2016|work=Hindustan Times}}</ref> In the state of Bihar, 15 trains were blocked and stranded, while the states of West Bengal, Maharashtra and Uttar Pradesh saw protest marches and rallies led by opposition parties.<ref name="bandh1">{{cite web|url=https://www.hindustantimes.com/india-news/live-opposition-protests-over-demonetisation-today-parties-divided-over-bandh/story-gSNK8OiyW2oy6VMumKOjVN.html|title=As it happened: Bharat Bandh affects some states, business as usual in others|publisher=Hindustan Times|access-date=28 November 2016|date=28 November 2016}}</ref> In the state of Kerala, shops and business establishments were shut, with schools and colleges closed throughout the state, while movements of private vehicles were also disrupted in Northern Kerala.<ref name="bandh1" />

Former Indian Chief Election Commissioner, O. P. Rawat stated that 'the note ban had absolutely no impact on black money', and that record amounts of money had been seized in polls held after demonetisation.<ref>{{cite web|url=https://indianexpress.com/article/india/op-rawat-cec-note-ban-black-money-polls-assembly-elections-mizoram-5474369/|title=OP Rawat: 'Note ban had absolutely no impact on black money. During polls we seized a record amount'|date=2 December 2018}}</ref>

===International reactions===
By and large, initial international response was positive which saw the move as a bold crackdown on corruption.<ref name="IMF-response"/><ref name="Chinese state media"/><ref name="Swedish Minister"/> The [[Organization:International Monetary Fund|International Monetary Fund]]'s spokesperson Gerry Rice told that it supported the efforts to fight corruption and illegal finances but cautioned about the disruptions.<ref name="IMF-response">{{Cite news|url=https://www.business-standard.com/article/news-ani/imf-supports-pm-modi-s-demonetization-move-in-fight-against-corruption-116111100142_1.html|title=Support by IMF|date=11 November 2016|work=Business Standard}}</ref>

Chinese state media ''Global Times'' praised the move as a "fierce fight against black money and corruption."<ref name="Chinese state media">{{Cite news|url=https://www.thehindu.com/news/national/china-state-media-praises-modi-but-says-he/article9343797.ece|title=State media praises Modi, but says he can learn from China's crusade against corruption|first=Atul|last=Aneja|date=14 November 2016|newspaper=The Hindu}}</ref> Former Prime Minister of Finland and vice-president of European Commission Jyrki Katainen welcomed the demonetisation move stressing that bringing transparency will strengthen the Indian economy.<ref>{{Cite news|url=https://economictimes.indiatimes.com/news/economy/policy/indias-crackdown-on-black-money-to-help-financial-system-eu/articleshow/55399290.cms|title=European Union welcomes India's step on demonetisation |newspaper=The Economic Times|date=13 November 2016 }}</ref><ref>{{cite web|url=https://www.news18.com/news/business/indias-crackdown-on-black-money-will-help-financial-system-european-union-1311545.html|title=India's Crackdown on Black Money Will Help Financial System: European Union|date=13 November 2016}}</ref> BBC's South Asia Correspondent Justin Rowlatt in his article praised the move for its secrecy.<ref>{{Cite news|url=https://www.bbc.com/news/world-asia-india-37974423|title=Why India wiped out 86% of its cash overnight|first=Justin|last=Rowlatt|date=14 November 2016|work=bbc.com}}</ref> Tim Worstall wrote in ''{{wipe|Forbes}}'' that demonetisation was having positive macroeconomic effects.<ref>{{cite web|url=https://www.forbes.com/sites/timworstall/2016/11/17/indias-rs-500-and-1000-demonetisation-is-lowering-interest-rates-and-also-inflation/|title=India's Rs 500 And 1,000 Demonetization Is Lowering Interest Rates And Also Inflation|first=Tim|last=Worstall|website={{wipe|Forbes}}|access-date=24 November 2016}}</ref> Swedish Minister of Enterprise Mikael Damberg supported the move by calling it a bold decision.<ref name="Swedish Minister">{{Cite news|url=https://www.thehindu.com/opinion/interview/interview-with-mikael-damberg/article9340999.ece?w=alauto|title=Swedish ICT sector wouldn't have been so successful without Indian help|first=Arun|last=S|date=13 November 2016|newspaper=The Hindu}}</ref>

The demonetisation also came in for sharp criticism from media outside India,<ref name="Reckless Blunder">{{cite news|title=Modi's demonetisation move a reckless bungle: Foreign media|url=https://timesofindia.indiatimes.com/india/modis-demonetisation-move-a-reckless-bungle-foreign-media/articleshow/56210502.cms|work=The Times of India|date=28 December 2016}}</ref><ref>{{cite news|url=https://www.thecitizen.in/index.php/OldNewsPage/?Id=9260|title="Worst Mistake of PM Modi's Career": World Media and Economists Decry Demonetisation "Havoc" in India|first=Gayeti|last=Singh|date=23 November 2016|work=The Citizen|archive-url=https://web.archive.org/web/20170116192244/https://www.thecitizen.in/index.php/OldNewsPage/?Id=9260|archive-date=16 January 2017}}</ref> with ''{{wipe|The New York Times}}'' saying that the demonetisation was "atrociously planned" and that it did not appear to have combatted black money,<ref>{{Cite web|url=https://www.indiatoday.in/india/story/demonetisation-atrociously-planned-and-executed-nyt-954288-2017-01-10|title=Demonetisation atrociously planned, little evidence it combatted black money: New York Times|website=India Today}}</ref><ref>{{cite web|url=http://indianexpress.com/article/india/indians-suffering-after-atrociously-planned-note-ban-nyt-4468403/|title=Little evidence that demonetisation has succeeded in combating corruption: New York Times|date=10 January 2017}}</ref> while an article in ''{{wipe|The Guardian}}'' stated that "Modi has brought havoc to India".<ref name="Reckless Blunder" /> The ''Harvard Business Review'' called it "a case study in poor policy and even poorer execution".<ref>{{cite journal|url=https://hbr.org/2016/12/indias-botched-war-on-cash|title=India's Botched War on Cash|journal=Harvard Business Review|date=14 December 2016|last1=Chakravorti |first1=Bhaskar }}</ref> The frequent change in the narrative on objectives of the demonetisation to its visible impact on the poorest of the poor made other critiques calling the government's narrative as spins in view of the "pointless suffering on India's poorest."<ref>{{cite web | url =https://theconversation.com/modis-bank-note-ban-has-inflicted-pointless-suffering-on-indias-poorest-69157| title= Modi's bank note ban has inflicted pointless suffering on India's poorest| first=Ranjit | last=Goswami | date = 25 November 2016 | access-date = 25 January 2017|work=The Conversation}}</ref>

==Political impact==
Akshay Mangala, an assistant professor at Harvard Business School, called the move "the politics of visible disruption". He noted that the people might attribute the implementation shortcomings to institutional weakness while the government could take credit for its attempt to curb the black money. He also noted that it may result in the public opinion in favour of the government which is led by the BJP if the opposition parties, led by the [[Social:Indian National Congress|INC]], fail to form the countervailing narrative.<ref>{{Cite news|url=https://casi.sas.upenn.edu/iit/amangla|title=Demonetization: The Politics of Visible Disruption|last=Mangala|first=Akshay|date=30 January 2017|work=Center for the Advanced Study of India (CASI), University of Pennsylvania|access-date=3 November 2018|language=en}}</ref> [[Organization:Massachusetts Institute of Technology|Massachusetts Institute of Technology]] associated academics [[Biography:Abhijit Banerjee|Abhijit Banerjee]] and Namrata Kala also opined the same.<ref name="voxdev"/>

The BJP and its allies formed the government in six out of seven state legislative assemblies which went to the elections in 2017, including the most populous state, Uttar Pradesh.<ref name="voxdev"/><ref name="htele17">{{Cite news|url=https://www.hindustantimes.com/india-news/assembly-elections-2017-demonetisation-pays-rich-dividends-to-modi/story-WrAyZ648Va8jTl9aDSFsZJ.html|title=Assembly elections 2017: Modi loses no money in demonetisation gamble|last=Murty|first=B Vijay|date=11 March 2017|work=Hindustan Times|access-date=3 November 2018|language=en}}</ref><ref>{{Cite news|url=https://www.livemint.com/Opinion/9GDh3bof2x0wASY1avlbAK/The-BJPs-UP-surge-Didnt-demonetisation-matter.html|title=The BJP's UP surge: Didn't demonetisation matter?|last=Sukumar|first=R.|date=11 March 2017|work=Live Mint|access-date=3 November 2018}}</ref><ref name="idiatvnewsele" /> BJP improved its performance in Uttarakhand<ref name="htele17" /><ref name="idiatvnewsele"/><ref>{{Cite news|url=https://www.hindustantimes.com/assembly-elections/assembly-elections-how-the-bjp-won-uttarakhand/story-9SSfVHcgDQvUx3GlLEvbkI.html|title=Assembly elections: How the BJP won Uttarakhand|date=11 March 2017|work=Hindustan Times|access-date=3 November 2018|language=en}}</ref> and Himachal Pradesh.<ref name="elegujhp"/><ref>{{Cite news | url=https://economictimes.indiatimes.com/news/politics-and-nation/bjp-juggernaut-rolls-on-in-gujarat-tramples-congress-in-himachal-pradesh/articleshow/62118782.cms | title=BJP juggernaut rolls on in Gujarat, tramples Congress in Himachal Pradesh| newspaper=The Economic Times| date=18 December 2017}}</ref> In Manipur and Goa, INC secured the plurality while BJP came second and formed the government with the help of its allies.<ref name="idiatvnewsele"/><ref>{{Cite news|url=https://timesofindia.indiatimes.com/india/post-poll-alliances-were-preferred-by-governor-in-goa-manipur-and-meghalaya/articleshow/64193358.cms|title=Post-poll alliances were preferred by governor in Goa, Manipur and Meghalaya|date=16 May 2018|work=The Times of India|access-date=3 November 2018|agency=PTI}}</ref> In Gujarat, BJP worsened its performance but retained the majority.<ref>{{Cite web|url=https://www.firstpost.com/politics/bjps-gujarat-win-proves-gst-demonetisation-arent-potent-weapons-congress-needs-new-strategy-to-fight-modi-4265889.html|title=BJP's Gujarat win proves GST, demonetisation aren't potent weapons; Congress needs new strategy to fight Modi|last=Unnikrishnan|first=Dinesh|date=19 December 2017|website=FirstPost|access-date=3 November 2018}}</ref><ref name="elegujhp">{{cite news | url=https://timesofindia.indiatimes.com/india/bjp-retains-gujarat-tramples-congress-in-himachal-pradesh/articleshow/62121182.cms | title=BJP retains Gujarat, ousts Congress from Himachal Pradesh – Times of India| website=The Times of India| date=18 December 2017}}</ref> The BJP and its allies lost to the INC in Punjab.<ref name="idiatvnewsele">{{Cite news|url=https://www.indiatvnews.com/business/news-demonetisation-litmus-test-for-bjp-one-year-on-can-modi-hold-his-sway-on-the-electorate-410739|title=Demonetisation a litmus test for BJP: One year on, can Modi hold his sway on the electorate?|last=Peeyush|first=Parimal|date=7 November 2017|access-date=3 November 2018|language=en-US}}</ref>

==Long term impact==
In 2019, India experienced an economic slowdown which was attributed to demonetisation and several other factors.<ref>{{Cite web |url=https://economictimes.indiatimes.com/news/economy/indias-economy-slows-stalling-once-thriving-manufacturing/growth-at-5/slideshow/71151545.cms |title=Growth at 5% - India's economy slows, stalling once thriving manufacturing &#124; the Economic Times |access-date=4 January 2020 |archive-date=11 October 2019 |archive-url=https://web.archive.org/web/20191011030307/https://economictimes.indiatimes.com/news/economy/indias-economy-slows-stalling-once-thriving-manufacturing/growth-at-5/slideshow/71151545.cms |url-status=dead }}</ref><ref>{{Cite web | url=https://apnews.com/624d7869488e47a39ba7522e464ef6e9 | title=India's economy slows, stalling once thriving manufacturing| website=Associated Press| date=16 September 2019}}</ref>

During the COVID-19 pandemic, there was an increase in digital payments.{{Citation needed|date= May 2023}} The general rise in digital payments and cashless transactions has been attributed to the demonetisation. Although data released by RBI in Nov 2021 showed that cash circulation in India has actually increased significantly since demonetization and demonetization has not necessarily converted cash users to digital users.<ref>{{cite news|url=https://www.financialexpress.com/money/how-demonetisation-is-helping-india-transact-under-the-shadow-of-covid-19-in-2020/2157129/|title=How demonetisation is helping India transact under the shadow of Covid-19 in 2020|date=24 December 2020|publisher=Financial Express (India)}}</ref>

As of November 2021, further increases in digital payments and bank notes in circulation have been seen.<ref>{{cite news|url=https://www.business-standard.com/article/economy-policy/post-demonetisation-notes-in-circulation-on-rise-so-are-digital-payments-121110700404_1.html|title=Post demonetisation, notes in circulation on rise; so are digital payments|publisher=Business Standard|date=7 November 2021}}</ref>

== In popular culture ==
* ''Puthan Panam'', a 2017 film directed by Renjith based on the issue of black money and demonetisation.
*''Aadu 2'', a 2017 film revolves around demonetisation.
* ''Golak Bugni Bank Te Batua'', a 2018 Punjabi film also revolves around demonetisation.
* ''Chappad Phaad Ke'', a 2019 Disney+ Hotstar film revolves around demonetisation
* ''Choked'', a 2020 [[Company:Netflix|Netflix]] film directed by Anurag Kashyap is set in backdrop of demonetisation.
* ''Cash'', a 2021 Disney+ Hotstar film
* ''Avrodh: The Siege Within 2'', a 2022 web series on [[SonyLIV]]

== See also ==
* [[Finance:Indian black money|Indian black money]]
* Mahatma Gandhi New Series
* Income declaration scheme, 2016
* Pradhan Mantri Garib Kalyan Yojana

==Further reading==
* {{cite book |last1=Sanyal |first1=Meera |title=The Big Reverse: How Demonetization Knocked India Out |date=10 November 2018 |publisher=Harper Collins |isbn=978-93-5302-395-9 |url=https://books.google.com/books?id=a5hyDwAAQBAJ |access-date=24 October 2023 |language=en}}


== References ==
{{reflist}}

== External links ==
* [http://indiatoday.intoday.in/story/rupees-500-1000-currency-note-faq-narendra-modi/1/805954.html What the FAQ just happened! All your questions about Rs 500–1000 notes answered], ''India Today'', 8 November 2016
* [https://rbi.org.in/Scripts/FAQView.aspx?Id=119 FAQ answers and Guidelines on Reserve Bank of India]
* [http://www.finmin.nic.in/ Ministry of Finance, Government of India]
* Litvack, L., & Vigne, S. (2017). ''Demonetisation in India and Emerging Challenges: A Report Delivered to the Department for the Economy, Northern Ireland and the Government of India by Queen's University Belfast and O.P. Jindal Global University''. Belfast: Queen's University Belfast. http://pure.qub.ac.uk/portal/files/131517443/Final_report.pdf


[[Category:Monetary reform]]

{{Sourceattribution|2016 Indian banknote demonetisation}}