Note ban led to financialisation of economy and decline of manufacturing

The demonetisation of high-value currency notes on November 8, 2016, was a big economic and monetary shock and its impact can be felt even today. A deep dive into macroeconomics and market data suggests it accelerated the financialisaton of the Indian economy and reduced the role of manufacturing and industry.

The end result was a steady decline in economic growth rate despite large expansion in the government sector and good show by the farm sector. On bourses, retail lenders became the dominant force as the gush of liquidity into the banking system, after the note ban, led to an unprecedented boom