It has been over three months since the November 2016 surprise demonetisation of 86 per cent of India’s currency in circulation. The short-run costs of the measure are becoming clearer. India’s industrial production sector, for instance, has been hit hard with negative growth in December 2016. Overall, the aggregate growth cost of the demonetisation measure is expected to be up to 1 per cent of GDP.
Ashima Goyal is Professor of Economics at the Indira Gandhi Institute of Development Research, Mumbai.