Demonetisation debate: Why note ban was no failure but a mistake regardless

Judging only by cash that came back to banks is a politically attractive way of simplifying things, but, as in case of bank nationalisation, there are dimensions that will become apparent with time

Ever since November 9, 2016, a debate has been in progress over Prime Minister Narendra Modi’s decision to demonetise high-value Indian currency. Some criticised it and some supported it.

But it was only last week, when the Reserve Bank of India (RBI) finally came out with its report on how much of the demonetised old currency had been extinguished that we got something concrete to judge the decision by.

The RBI said only a fraction, around Rs 120 billion of the over Rs 17 trillion worth of demonetised currency, had not come back. This has been taken to mean that demonetisation has