Does Demonetisation Tackle Black Money?

 At the stroke of midnight on November 8, 86% of the value of Indian currency in circulation ceased to be a legal tender. Many different adjectives are being used to qualify the action – surgical strike, master stroke, third freedom (after freedom from British and license raj), 'Massive swachh abhiyan' and so on.

Though the government and even the RBI vehemently defend demonetization, its implementation is continuously taking a toll on the common masses. Citizens are put into extreme hardships. The past few days are witnessing a total lack of preparedness by banks and post offices. They lack the institutional capacity to deal with such a huge magnitude of workload. Hoards of people began to throng banks and ATMs leading to chaos and aggression. People are starting to break open shops for food as cash is not available to buy essential things.

Prof. Prabhat Patnaik spoke at a public meeting organised by Center for Financial Accountability and Public Finance and Public Accountability Collective.