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Talk Point: What has India gained from demonetisation and what are the lessons learnt?

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Exactly a year ago, Prime Minister Narendra Modi announced an ambitious but enormously disruptive decision to invalidate Rs 1000 and Rs 500 notes, ostensibly to combat corruption, counterfeiting and terror funding. Demonetisation triggered public panic, slowed manufacturing, sent workers home and affected economic growth.

The RBI said in August that 99 per cent of the cash was returned. But the move forced citizens to adopt digitisation at an unprecedented pace, in a country where 80 per cent of transactions were conducted in cash. And it helped the BJP win the election in UP.

So, what has India gained and lost from demonetisation and what are the lessons learnt?

Milan Vaishnav
Senior fellow and director of the South Asia program at the Carnegie Endowment for International Peace

“At a time when the economy appears to be flagging, demonetisation and the fight against black money provides the BJP with an alternative narrative. In 2019, it will claim that the PM is incorruptible and the party took the strongest measures against corruption on record.”

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Radhika Pandey
Consultant, NIPFP

“The moot question is: Was the short-term disruption thanks to demonetisation worth it? The answer is a qualified ‘no’.”

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T.S.R. Subramanian
Former cabinet secretary

“Demonetisation was the first shot, and a wake-up call for transformation. It remains to be seen if our politics will allow the country a chance.”

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Ritika Mankar Mukherjee
Senior Economist, Ambit Capital

“Our primary data surveys suggest that economic activity in the informal sector are yet to recover from the shock and the proof of that has been the fact that no job creation seems to have taken place in this sector. ”

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Manish Tewari,
National spokesperson, Congress

“Legality aside even on the three objectives that the NDA/BJP had propounded as the raison d’être for demonetisation the government has come up short. ”

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Arun Kumar 
Retired professor, JNU

“We have gained nothing from demonetisation. It couldn’t manage to curb black money, it couldn’t manage to counter terrorism, and it couldn’t manage to stop counterfeit currency being circulated.”

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Pranab Dhal Samanta 
Editor, ThePrint

“The government has no choice but to make demonetisation appear successful, else it stands the risk of losing its credibility in economic policy making.”

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Syed Zafar Islam
BJP spokesperson for political and economic affairs

“The disadvantages are none, except the short-term hardships and the marginal slowdown of GDP.”

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