All Pain, No Gain: India’s Failed Demonetization Is a Lesson to All

It was on Nov. 8, 2016, in a shock announcement, that Indian Prime Minister Narendra Modi announced around dinnertime that banknotes of Rs.500 and Rs.1000 would no longer be legal tender starting midnight.

It has been exactly a month since he made that announcement. His key objectives in scraping 86 percent of the circulating currency in a country of over 1 bln people, was to remove “black money” out of the system, fight counterfeiters and stop the financing of terrorist organizations. While it can be argued that the measure may have had limited success in all of these fields, the demonetization policy has broadly failed.