The ratio of currency in circulation as share of broad money is back at pre-demonetisation levels, according to Reserve Bank of India data
On 8 November 2016, Prime Minister Narendra Modi announced the “demonetisation" of high-value currency notes. When it became clear the ex ante goals of reducing corruption and black money were unlikely to succeed, attention shifted to a range of possible ex post facto rationales for the move. Numerous commentators, including the two of us, argued that one such goal would be to push the economy towards greater formalisation, and, relatedly, to push the financial sector towards greater digitisation and a reduced reliance on cash. This broad rationale was then quickly picked up by the Modi government and its supporters.
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