Letter to BS: Cascading effect of demonetisation on trade

The nation has not yet forgotten the horrors of demonisation announced by the government on November 8, 2016, which had a cascading affect on trade. More than 100 people died while standing in queues to get their own money. The problem of empty ATMs seems to have returned to haunt citizens in several parts of the country. After demonetisation the government repeatedly declared that the situation will improve shortly but now again the government and the Reserve Bank of India are in the damage control mode. They, however, insist there is enough currency in the system. If that version is believed the question is, where has the currency available with the government gone. Despite the RBI pumping in lower denomination notes, the fact that ATMs are running dry suggests that either high value denominations are not being circulated or they are not being deposited in banks. The fresh cash crunch shows notebandi aftershocks are still being felt. Looks like the dark days of demonetisation have come back. The next financial crisis would likely be stronger and more dangerous than in the past one. 
 

S K Khosla  Chandigarh

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