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Five years of demonetisation: A quick look at how it affected the economy

Despite the government’s attempts to encourage payment digitization and discourage cash transactions, cash transactions in the country continue to rise gradually.

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Five years of demonetisation

By: Kritika Bobal

It was a normal day for everyone until 8:15 p.m. when Prime Minister Narendra Modi jolted the country by stripping a monetary unit of its legal tender status. PM Modi stated that Rs 500 and Rs 1,000 notes—86 percent of all currency notes in circulation in terms of value—would be pulled from the circulation and will no longer be accepted as legal tender after 12 a.m.

In compensation for the demonetised banknotes, it also announced the issuance of new 500 and 2,000 currency notes. This sudden announcement not only tremored the souls of the poor but also affected the middle-class people, mainly the businessmen.

The country’s unorganized sector, which includes small-scale companies and micro home units, collapsed overnight. Millions of such units that relied on real currency watched their banknotes degrade into mere scraps of paper overnight. To compensate for the loss incurred during the fiscal term, the organized sector was forced to lay off workers.

The objective of demonetisation was to eradicate black money, reduce the use of fake notes, increasing digitization, and ease the transition of India’s non-formal sector into a formal sector. However, the idea backfired substantially in the days that followed, as persistent cash shortages disrupted people’s daily lives.

Five years of demonetization: A quick look at how it affected the economy

People who wanted to exchange their money had to wait in long queues, and numerous people died around the nation. The crisis continued, and individuals in misery waited for hours in front of banks, even after December 30, 2016, the final day the RBI allowed residents to deposit their old notes.

Despite fears of an economic disaster hovering over the country in recent years, the economy has managed to leapfrog in recent years, five years after the government declared demonetisation. Despite the government’s attempts to encourage payment digitization and discourage cash transactions, cash transactions in the country continue to rise gradually. Similarly, the country’s cash-to-GDP ratio fell from 12 percent as a result of demonetization but recovered in later years.

Read Also: Punjab CM: Petrol price cut by Rs 10, diesel by Rs 5

According to National Crime Records Bureau statistics, the number of reported instances for making Fake Indian Currency Notes increased 190.5 percent from 2019 to 2020, an 11.7 percent increase. Similarly, there was an 11.7 percent rise in occurrences of counterfeit cash notes in 2019 compared to 2018.

In Tamil Nadu, a 65-year-old visually impaired man has filed a petition with the Krishnagiri district collector’s office, requesting to exchange his old demonetized notes of Rs 500 and Rs 1,000, amounting to Rs. 65,000 in total. He stated that the money was his life savings, which he earned via begging.

India News

Padma Awards 2025: Full list of Padma Vibhushan, Padma Bhushan, Padma Shri awardees

The awards recognize outstanding achievements across all fields, with a focus on public service. The recipients are selected by a committee appointed by the Prime Minister.

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The central government announced the recipients of the prestigious Padma Awards on Saturday. These awards, conferred annually on the eve of Republic Day, represent India’s highest civilian honours. They are presented in three categories: Padma Vibhushan (for exceptional and distinguished service), Padma Bhushan (for distinguished service of a higher order), and Padma Shri (for distinguished service).

The awards recognize outstanding achievements across all fields, with a focus on public service. The recipients are selected by a committee appointed by the Prime Minister.

This year, a total of 199 awards were presented: 7 Padma Vibhushan, 19 Padma Bhushan, and 113 Padma Shri. The President of India bestows these awards at a formal ceremony in Rashtrapati Bhawan, typically held in March or April.

List of Padma Award Winners 2024:

Padma Vibhushan:

  • Duvvur Nageshwar Reddy
  • Justice (Retd.) Jagdish Singh Khehar
  • Kumudini Rajnikant Lakhia
  • Lakshminarayana Subramaniam
  • MT Vasudevan Nair (Posthumous)
  • Osamu Suzuki (Posthumous)
  • Sharda Sinha (Posthumous)

Padma Bhushan:

  • A Surya Prakash
  • Anant Nag
  • Bibek Debroy (Posthumous)
  • Jatin Goswami
  • Jose Chacko Periappuram
  • Kailash Nath Dikshit
  • Manohar Joshi (Posthumous)
  • Nalli Kuppuswami Chetti
  • Nandamuri Balakrishna
  • PR Sreejesh
  • Pankaj Patel
  • Pankaj Udhas (Posthumous)
  • Rambahadur Rai
  • Sadhvi Ritambhara
  • S Ajith Kumar
  • Shekhar Kapur
  • Shobana Chandrakumar
  • Sushil Kumar Modi (Posthumous)
  • Vinod Dham

Padma Shri:

  • Advaita Charan Gadanayak
  • Achyut Ramchandra Palav
  • Ajay V Bhatt
  • Anil Kumar Boro
  • Arijit Singh
  • Arundhati Bhattacharya
  • Arunoday Saha
  • Arvind Sharma
  • Ashok Kumar Mahapatra
  • Ashok Laxman Saraf
  • Ashutosh Sharma
  • Ashwini Bhide Deshpande
  • Baijnath Maharaj
  • Barry Godfray John
  • Begam Batool
  • Bharat Gupt
  • Bheru Singh Chouhan
  • Bhim Singh Bhavesh
  • Bhimawa Doddabalappa Shiilekyathara
  • Budhendra Kumar Jain
  • C S Vaidyanathan
  • Chaitram Deochand Pawar
  • Chandrakant Sheth (Posthumous)
  • Chandrakant Sompura
  • Chetan E Chitnis
  • David R Syiemlieh
  • Durga Charan Ranbir
  • Farooq Ahmad Mir
  • Ganeshwar Shastri Dravid
  • Gita Upadhyay
  • Gokul Chandra Das
  • Guruvayur Dorai
  • Harchandan Singh Bhatty
  • Hariman Sharma
  • Harjinder Singh Srinagar Wale
  • Harvinder Singh
  • Hassan Raghu
  • Hemant Kumar
  • Hriday Narayan Dixit
  • Hugh and Colleen Gantzer (Posthumous)
  • Inivalappil Mani Vijayan
  • Jagadish Joshila
  • Jaspinder Narula
  • Jonas Masetti
  • Joynacharan Bathari
  • Jumde Yomgam Gamlin
  • K. Damodaran
  • K L Krishna
  • K Omanakutty Amma
  • Kishore Kunal (Posthumous)
  • L Hangthing
  • Lakshmipathy Ramasubbaiyer
  • Lalit Kumar Mangotra
  • Lama Lobzang (Posthumous)
  • Libia Lobo Sardesai
  • M D Srinivas
  • Madugula Nagaphani Sarma
  • Mahabir Nayak
  • Mamata Shankar
  • Manda Krishna Madiga
  • Maruti Bhujangrao Chitampalli
  • Miriyala Apparao (Posthumous)
  • Nagendra Nath Roy
  • Narayan (Bhulai Bhai) (Posthumous)
  • Naren Gurung
  • Neerja Bhatla
  • Nirmala Devi
  • Nitin Nohria
  • Onkar Singh Pahwa
  • P Datchanamoorthy
  • Pandi Ram Mandavi
  • Parmar Lavjibhai Nagjibhai
  • Pawan Goenka
  • Prashanth Prakash
  • Pratibha Satpathy
  • Purisai Kannappa Sambandan
  • R Ashwin
  • R G Chandramogan
  • Radha Bahin Bhatt
  • Radhakrishnan Devasenapathy
  • Ramdarash Mishra
  • Ranendra Bhanu Majumdar
  • Ratan Kumar Parimoo
  • Reba Kanta Mahanta
  • Renthlei Lalrawna
  • Ricky Gyan Kej
  • Sajjan Bhajanka
  • Sally Holkar
  • Sant Ram Deswal
  • Satyapal Singh
  • Seeni Viswanathan
  • Sethuraman Panchanathan
  • Sheikha Shaikha Ali Al-Jaber Al-Sabah
  • Sheen Kaaf Nizam (Shiv Kishan Bissa)
  • Shyam Bihari Agrawal
  • Soniya Nityanand
  • Stephen Knapp
  • Subhash Khetulal Sharma
  • Suresh Harilal Soni
  • Surinder Kumar Vasal
  • Swami Pradiptananda (Kartik Maharaj)
  • Syed Ainu Hasan
  • Tejendra Narayan Majumdar
  • Thiyam Suryamukhi Devi
  • Tushar Durgeshbhai Shukla
  • Vadiraj Raghavendracharya Panchamukhi
  • Vasudeo Kamath
  • Velu Assaan
  • Venkappa Ambaji Sugatekar
  • Vijay Nityanand Surishwar Ji Maharaj
  • Vijayalakshmi Deshamane
  • Vilas Dangre
  • Vinayak Lohani

Note that “(Posthumous)” indicates the award was given posthumously.

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Republic Day 2025: RSS chief Mohan Bhagwat says respect differences, live in harmony

Attempting a task without understanding, he warned, is akin to acting like a “lunatic,” leading to wasted effort and potential problems. This concept extended beyond culinary skills to encompass all aspects of life, highlighting the need for informed action and diligent work ethics.

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At the 76th Republic Day celebration in Bhiwandi, Maharashtra, RSS chief Mohan Bhagwat on Sunday asserted the importance of unity and understanding in a diverse society. His speech, delivered after unfurling the national flag at a local college, extended beyond the celebratory aspects of the day, focusing on the responsibilities inherent in Indian citizenship.

Bhagwat’s central theme revolved around the need for societal cohesion, a concept he presented as crucial for harmonious coexistence. He acknowledged the presence of diversity within India, contrasting the nation’s approach with global conflicts often fueled by similar differences.

He argued that while individual distinctions and specializations should be respected, they should not overshadow the paramount importance of mutual respect and collaborative living. His analogy extended to the familial and community levels; just as a family requires harmony for its well-being, so too does a town and, ultimately, the nation. Internal conflicts, he implied, undermine the collective good.

He further emphasised the critical role of knowledge and dedication in achieving individual and societal success. Bhagwat used the simple act of cooking rice as a powerful metaphor. He explained that simply possessing the ingredients – rice, water, and heat – is insufficient; the knowledge of how to combine them properly is essential for a successful outcome.

Attempting a task without understanding, he warned, is akin to acting like a “lunatic,” leading to wasted effort and potential problems. This concept extended beyond culinary skills to encompass all aspects of life, highlighting the need for informed action and diligent work ethics.

His message extended into the realm of interpersonal relationships, highlighting the importance of faith and dedication. He contrasted the impersonal service received at a hotel with the welcoming hospitality often found in a home.

At a hotel, a simple request for water might be met with indifference or even hostility. However, at home, a similar request is usually met with generosity and warmth. This difference, he explained, lies in the presence of faith and dedication; actions rooted in trust and commitment invariably yield more positive results. Bhagwat concluded by emphasising that such faith and dedication are vital not only for personal fulfilment but also for building strong, harmonious communities and a thriving nation.

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Congress chief Kharge extends Republic Day greetings, slams Modi govt, says secularism being targeted by Goebbelsian propaganda

He claimed that minorities are being systematically targeted, and those advocating for secularism are subjected to what he termed “Goebbelsian propaganda,” a reference to Nazi Germany’s manipulative propaganda techniques. He further asserted that weaker sections of society – Scheduled Castes, Scheduled Tribes, Other Backward Classes, the poor, and minorities – are treated as second-class citizens.

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On India’s 76th Republic Day, Congress President Mallikarjun Kharge delivered a message that was as much a celebration of the Constitution’s 75th anniversary as it was a scathing critique of the current political climate.

He began by honouring the architects of the Constitution, mentioning Mahatma Gandhi, Jawaharlal Nehru, Sardar Patel, B.R. Ambedkar, Subhas Chandra Bose, Rajendra Prasad, Maulana Azad, and Sarojini Naidu, acknowledging their monumental contribution to shaping India’s republic.

He extended his appreciation to the nation’s armed forces, paramilitary personnel, security forces, scientists, teachers, farmers, and the diverse workforce – including daily wage earners, gig workers, artists, writers, and sportspersons – for their indispensable roles in nation-building and preserving India’s rich cultural tapestry.

However, the celebratory tone was quickly overshadowed by a stark assessment of the nation’s democratic health. Kharge expressed deep concern over what he characterized as a decade-long erosion of democratic principles and institutions. He alleged a deliberate and malicious campaign fueled by religious fundamentalism, designed to fracture Indian society along religious lines.

He claimed that minorities are being systematically targeted, and those advocating for secularism are subjected to what he termed “Goebbelsian propaganda,” a reference to Nazi Germany’s manipulative propaganda techniques. He further asserted that weaker sections of society – Scheduled Castes, Scheduled Tribes, Other Backward Classes, the poor, and minorities – are treated as second-class citizens.

The Congress president directly accused the ruling government of political interference in autonomous institutions, asserting that the control over independent bodies is perceived as a mark of power. He claimed that federalism is being systematically undermined, with the rights of opposition-governed states being curtailed.

The functioning of Parliament, he stated, has significantly deteriorated due to what he described as the tyrannical tendencies of the ruling government. Universities and self-governing institutions, he continued, face constant intrusion, and a large segment of the media has been co-opted as a propaganda tool. The suppression of dissent through the targeting of opposition leaders, he argued, has become the government’s primary policy.

The ongoing crisis in Manipur served as a stark illustration of his concerns, with Kharge highlighting the state’s prolonged turmoil and the lack of accountability at the highest levels of power.

He concluded his message with a fervent call to protect the Constitution’s fundamental values of justice, liberty, equality, and fraternity, emphasizing that these tenets are being systematically undermined by what he called an authoritarian regime.

He urged citizens to be prepared to make sacrifices to defend the Constitution, viewing this as a fitting tribute to their ancestors. His statement ended with the powerful slogan: “Jai Bapu, Jai Bheem, Jai Samvidhaan. Jai Hind.”

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