Was demonetisation a good idea, badly implemented?

I have heard this from the supporters of the regime but, to my surprise, even friends who are otherwise critical believe this to be true. The government’s stated aim for denotifying high-value currency notes with a four-hour deadline on November 8, 2016, was to land a body blow to the black economy and corruption in India. This, after all, was one of the major planks on which Narendra Modi had been elected.

It is somewhat perplexing that despite the well-documented devastating economic fallout of the move, the people who bore the brunt of it nevertheless re-elected the government in 2019. To my mind, the reason is that the majority of the electorate believed that the intentions behind this move were noble. The government built a powerful political narrative in the face of a very personalised misery.

Let us engage with various arguments advanced to claim that demontisation was a good idea. The claims presented below are by no means exhaustive but they could be seen as broadly the areas of concern.

Claim 1: Cash is black money

This conception of black economy is incorrect. This assumption lies at the heart of the exercise of demonetisation but unfortunately that is the biggest flaw of…

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