Overview
- The policy announced on November 8, 2016 withdrew the old ₹500 and ₹1,000 notes and effectively invalidated roughly 86–87% of cash in circulation by value.
- Reserve Bank of India data show about ₹15.31 lakh crore — roughly 99.3% of the withdrawn currency — was returned to the banking system after the exercise.
- Independent estimates and contemporaneous studies put the immediate cost at an output loss of roughly 1–2.5% of GDP in 2016–17 and highlight sharp hardship for cash-dependent informal workers and small traders.
- Digital payments, especially UPI, expanded rapidly after 2016 but the currency-to-GDP ratio stayed near 12%, indicating that smartphone adoption and the COVID-19 shock also drove the shift while cash remained important.
- Political leaders and regional figures have renewed calls for a consolidated, government-led accounting of costs, tax and enforcement outcomes and counterfeiting trends after a decade that showed overall falls in counterfeit detections but a rise in counterfeit new ₹500 notes.