https://www.rediff.com/news/column/aakar-patel-demonetisation-why-did-rbi-protect-modi/20231117.htm 

Anil Bokil runs an institution called ArthaKranti (economic revolution), and describes himself as an economic theorist.

On the ArthaKranti Web site, the benefits of demonetisation which were conveyed to Modi at that meeting are listed, including: 'Terrorist and anti-national activities would be controlled', 'the motive for tax avoidance would be reduced', 'corruption would be minimised' and there would be a 'significant growth in employment'. What's not to like?

Modi had been specifically warned by the RBI -- the body that actually had to demonetise the notes of currency its governor had guaranteed with his signature and was arm-twisted into doing so -- that demonetisation was a mistake.

Raghuram Rajan resigned as governor after having discussed and disapproved of this move.

The new governor Urjit Patel was forced to accept it by Modi within weeks of taking office.

Of course, events proved that on every count the RBI had accurately predicted both the damage and the lack of benefit.

by Aakar Patel

17/11/2023

The RBI announced on May 19 that it intends to phase out of circulation the Rs 2,000 note, the aesthetically ugly pink currency note that nobody wanted to own. The central bank admitted that the currency note, an aberration in the denominational structure of the Indian currency regime, was only introduced to facilitate the “expeditious” expansion of the value of currency in circulation after demonetisation. The note was introduced because of the sudden evisceration of more than 86% of value of all currency in circulation in the economy, following the withdrawal of the Rs 500 and Rs 1,000 notes.

https://thewire.in/economy/rs-2000-note-withdrawal-demonetisation-effects 

The RBI appears to admit, without any embarrassment whatsoever, that once the purpose of inflating the value of currency in circulation has been served, there is no further need for the denomination. 

Every instance of demonetisation in history — and there have been very few of them — has been made in a country hit by hyperinflation. No country staking claims to a seat at the high table, and certainly not one whose leadership never tires of boasting that it is one of the world’s largest, has ever deigned to have achieved anything by using demonetisation as an economic policy tool. In fact, no standard textbook on economics cares to even make a passing reference to demonetisation. Modi thought otherwise, and the country paid a very heavy price.

The same sections that were hit hard by demonetisation, in particular small and informal businesses in both urban as well as rural areas, were hit again, first as a result of the imposition of the Goods and Services Tax in 2017 and since 2020, as a result of the pandemic. The K-shaped growth of the Indian economy, one in which a thin sliver of society is doing very well, even as livelihoods of most Indians have turned significantly worse, is testimony to the widening inequality. Demonetisation was thus the harbinger of the forced immiseration of the Indian people. And it remains a work in progress.

by V. Sridhar

23/05/2023

नोटबंदी पर मोदी की इंटरनेशनल बेइज्जती, Question arising on NYT Report's on Modi's demonetisation   https://youtu.be/9JslqpporQ0?t=94  what the dissenting judgement said  ..https://youtu.be/9JslqpporQ0?t=430

Why demonetisation verdict raises more questions than answers https://www.fortuneindia.com/opinion/why-demonetisation-verdict-raises-more-questions-answers/111008
By not questioning Centre’s contrarian economic wisdom, RBI’s acquiescence and its own delay of 6 years to decide the writs, the court has failed to bring checks and balances and prevent recurrence.
By Prasanna Mohanty, Jan 4, 2023

its economic “wisdom or soundness” (the evidence for the policy) and the “procedural” flaws (the decision-making process) which have been glossed over. These two latter aspects raise questions about accountability and transparency in governance, institutional integrity (also independence) and democratic checks and balances. The implication: It’s still hard to prevent such an event in the future.

there is no doubt that demonetisation caused a derailment of economy (India was the fastest growing major economy in 2015) by wiping out 86.9% of high-value currency notes (of ₹500 and ₹1,000) overnight from a cash-based economy. It caused massive and overnight loss of jobs and (small) businesses and none of its objectives were achieved.

The then Chief Economic Advisor Arvind Subramanian called it “a massive, draconian, monetary shock” which he said led to a fall of the GDP growth from 8% in the previous six quarters to 6.8% in subsequent seven quarters. The then IMF chief economist Gita Gopinath warned the world against attempting it. The Finance Ministry’s 2012 white paper on black money had specifically rejected the proposal to demonetise ₹500 and ₹1,000 currency notes to fight black money.

Why did it then approve demonetisation? The minutes revealed: “The Board was assured that the matter has been under discussion between the Central Government and RBI over the last six months during which most of these issues have been considered. Apart from the stated objectives, the proposed step also presents a big opportunity to take the process of financial inclusion and incentivising use of electronic modes of payment forward as people see the benefits of bank accounts and electronic means of payment over use of cash”.

Policy and policy-making as ‘fait accompli’ : Even while turning it into academic and fait accompli, the court verdict could have addressed important governance issues (short for rash policy making and undermining democratic checks and balances) to prevent recurrence: by fixing the Centre’s accountability and transparency and the RBI’s institutional integrity.