Indian Economy / Monetary Policy
Nearly a decade after the 2016 demonetisation, Ghaziabad police exposed a racket secretly exchanging invalidated ₹500 and ₹1,000 notes, showing that remnants of an underground trade in old currency still operate. This discovery has reopened questions about whether the policy truly delivered on its core goals of eradicating black money and shutting down illicit cash channels.
Demonetisation’s broader legacy is more nuanced than its immediate effects. It gave a sharp push to digital transactions and formal financial habits, yet India’s dependence on cash eventually rebounded. The long-term outcome is the emergence of a dual system—a resilient cash economy functioning alongside a rapidly expanding digital payment ecosystem.
MCQ
What does the Ghaziabad currency-exchange racket indicate about demonetisation?
- Elements of an illegal market for old notes continue despite the 2016 ban
- Cash usage in India has dropped to near zero
- Demonetisation fully eliminated unaccounted cash flows
- Digital payments have made physical currency obsolete
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