If there is one thing India’s banknote ban has taught us, it is how the plan did not work. Swapping the most widely used currency for new bills was an attempt to remove “black money” from circulation. But it turns out most banknotes have been swapped successfully. Either there is no significant amount of black money in the cash economy, or the bad actors moved wealth into other assets. In the end, it appears this cash swap serves no real purpose.
One of the more pressing questions is whether or not India’s cash ban is a success. So far, the answer to this question is a resounding “no,” as no progress has been achieved. In fact, all it did was cause havoc on the Indian economy and create a whole set of new problems. The primary objective of countering the shadow market has not been achieved so far.
India’s Cash Swap Did Not Solve Any Problems
Combatting corruption by forcing a currency swap is a dubious decision, to begin with. The government forced people who brought in over 250,000 rupees of old currency to the bank had to provide a tax receipt. Even that measure did not do much to