The demonetisation puzzle

Was the massive economic disruption worth it?

A year after Prime Minister Narendra Modi stunned the nation by announcing the demonetisation of high-denomination currency notes, the government and the Bharatiya Janata Party (BJP) have declared that the anniversary will be celebrated as “anti-corruption” day. A corruption-fighting narrative is sound and clever political positioning and the ruling party has earned hefty dividends from it so far. Almost immediately after this highly polarising decision, the BJP had a resounding success in state Assembly elections — crucially sweeping aside all opposition in Uttar Pradesh. 

Government spokespersons also have data to back their claim that demonetisation reduced the cash-to-gross domestic product ratio