Demonetisation 2016. A Narrative of Political Economy and Beyond

Academic Paper from the year 2018 in the subject Economics - Finance, , language: English, abstract: When the Prime Minister Narendra Damodardas Modi made an announcement at 8.15 pm on 8th of November, 2016 about demonetisation of the high denomination notes, viz., the Rs 500 and Rs. 1000 currency notes, people had a very mixed response. People initially supported the move thinking that this would help the economy to become clean: the black money would be wiped out, terrorism would be controlled and fake notes would be removed from the economy. But the trouble people had to undertake, reported deaths in the media and the resultant outcome of demonetisation: all had led to diminishing support from the masses. As the basic objectives of demonetisation were found not to be convincing, the Government came out with a grand narrative which included objectives like removing corruption, digitalisation of the economy, formalisation of the economy, increased tax returns, increased tax revenue earning etc. This paper is an attempt to analyse demonetisation as a process, with particular emphasis on the demonetisation undertaken in November, 2016. The paper starts with basic meaning of demonetisation, why it is undertaken, whether other countries across the world have succeeded or failed with demonetisation, India’s experience with demonetisation, how was demonetisation planned in 2016 and an overall assessment, including the grand narrative that has come up over time.