Bhubaneswar: November 8, 2021 marks five years of demonetisation in India. On this day in 2016, in a televised address at 8 pm, Prime Minister Narendra Modi declared that currency notes of ₹500 and ₹1000 — these two denominations were 86% of the currency in circulation at the time in terms of value — would cease to be legal tender.
But, what has changed in the Indian economy in these five years? How many of these changes are linked to demonetisation?
The principal objective of demonetisation was to make the black money hoarded in large denomination notes of Rs 500 and Rs 1000 worthless pieces of paper.
While the government did not officially specify the extent of this black money, some senior officials of the government did indicate that this might be of the order of Rs 5 trillion or more.
Former prime minister Manmohan Singh had called the demonetisation drive as a “monumental mismanagement failure”. He had warned that GDP growth could fall by 2 per cent and it would hurt agriculture, small industry and everyone in the unorganised sector.
The former prime minister had said the demonetisation drive would have disastrous impact on the economy and termed the initiative as “a case of organised loot and legalised plunder”.
The Left parties Sunday hit out at the government over the state of the economy and blamed the Centre’s demonetisation policy for it. The demonetisation of high-denomination currency notes was announced by the government November 8, 2016.
Questioning the move, CPI(M) general secretary SitaramYechury alleged that it “decimated the informal sector”.
“Economy into a tailspin, the poorest hurt. Informal sector decimated. No black money recovered, but rich got richer. Cash in the economy is the highest ever now! This govt must bear responsibility for pushing India downhill, just for one man’s whim,” he said in a tweet.
Meanwhile, Priyanka Gandhi Vadra Monday termed it a “disaster” and asked if the step has been successful, why hasn’t corruption ended and black money returned to the country.
Furthermore, Senior Congress leader and Leader of the Opposition in the Rajya Sabha Mallikarjun Kharge on Monday alleged that Prime Minister Narendra Modi “destroyed” India’s economy through demonetisation.
Unemployment has risen, small businesses have been hit and closed. He (Modi) spoiled the country’s good economy through demonetisation,” Kharge told.