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1/4/2019 The impact on India's economy of demonetised currency returning to banks<br />
ECONOMY AND FINANCE<br />
GOVERNMENT AND POLICY<br />
OPINIONS<br />
The impact on India’s economy of demonetised<br />
currency returning to banks<br />
The pre-mature clamour based on single dimensional criteria of “all the money came back to<br />
banks” is meaningless by itself.<br />
SHASHANK GOYAL DECEMBER 25, 2018<br />
Prime Minister Narendra Modi<br />
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Engagements 14863<br />
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In November 2016, Prime Minister Modi announced the withdrawal of two high-value<br />
currency denominations from circulation with immediate effect. Some social media<br />
economists and mainstream journalists had speculated that a large chunk of unaccounted<br />
cash may not return to the banks, thus resulting in a windfall for the government.<br />
When most demonetised currency returned to the banks, questions were raised on the<br />
success of demonetisation itself. However, evaluating demonetisation’s success on this basis<br />
alone would be jumping the gun.<br />
In December 2016, Tim Worstall in his article in Forbes had argued that –<br />
The only practicable method of retaining the value of those old notes was to deposit them into the<br />
banking system.<br />
However, we should also note that those same amounts of cash which have been deposited are<br />
now inside the reporting system for tax. And undoubtedly there will be some decent portion of<br />
those deposits which were formerly black money and which now will be righteously taxed.<br />
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https://www.opindia.com/2018/12/modi-government-impact-of-demonetised-currency-returning-to-banks-on-indias-economy/ 1/11
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