BUSINESS (Credit: OpenAI )
Business News: On the evening of 8 November 2016, the Prime Minister addressed the nation on television. He announced that the old 500 and 1000 rupee notes would no longer be valid. People across the country were shocked for a few minutes because the news was sudden. The decision created confusion as everyone tried to understand what to do next. Banks and ATMs soon saw long lines of people wanting to exchange money. Businesses slowed down due to lack of cash in the market. The whole system entered a phase of sudden adjustment.
The government said the move was meant to stop black money stored in cash form. It was also aimed at ending fake notes used for illegal activities. Funding of terrorism was another reason mentioned. People believed that hidden unaccounted money would now get exposed. But the impact was not the same for everyone. The poor and working class faced more immediate difficulty. The idea sounded strong, but results were mixed in reality.
Banks became crowded with long queues from early morning. People waited for hours just to withdraw or deposit money. Many daily wage earners struggled because their earnings were mostly in cash. Households with weddings or ceremonies faced special challenges. ATMs ran out of cash frequently, adding to the stress. Market movement slowed down and smaller shops suffered. The country experienced a visible pause in regular financial flow.
To restore cash circulation, the RBI introduced the 2000 rupee note. A new 500 rupee note also entered the market soon after. Later, in 2017, the 200 rupee note was issued to balance transactions. In 2023, the RBI withdrew the 2000 rupee note from circulation, though it remains legal. People could still use it but not receive it from banks. Over time, the currency structure changed again. The market adapted, but slowly and steadily.
Reports showed that most banned notes returned to the banking system. About 99 percent of the old currency came back. This raised questions about the expected recovery of hidden black money. Fake notes reduced for some time but did not disappear fully. Even today, counterfeit currency cases are found in different regions. The main targets of the decision remain debated. The long-term results are not as clear as expected.
One major visible change was the rise of digital payments. UPI-based apps like Paytm, PhonePe and Google Pay spread to small towns and villages. The habit of cash-based transactions reduced. Even small shopkeepers and vegetable sellers began accepting QR payments. UPI transactions crossed multiple crore per day across India. People became more comfortable with online money transfer. This shift is seen as the biggest lasting outcome of the move.
Demonetisation is still discussed in homes, markets and political debates. Supporters say it pushed India into a modern digital economy. Critics argue that it brought unnecessary hardship to ordinary people. The actual gains and losses are still difficult to measure clearly. But the way India pays and receives money has changed permanently. Cash is no longer the only trusted mode. The impact of that night continues to shape India’s economic identity.
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