Demonetization: A Case from India
Kovid Bhardwaj*
*
MBA, Indian Institute of Management Lucknow
I. ABSTRACT
Purpose: The purpose of this paper is to analyze and critic on
the both positive and negative, short term and long term,
macroeconomic impacts that can happen due to one of a kind
radical demonetization program that happened in India.
Design/Methodology/Approach: The approaches taken to
analyze the impacts are qualitative as wells as they are examined
through time tested macroeconomic models like IS-LM.
Findings: In the study it was found that there is a impact to GDP
growth both due to lesser private consumption coming from
decreased marginal propensity to consume (MPC) as well as
from a decrease in money supply due to the fact that not only the
government wasn‟t able to refurbish the demonetized currency
in an accelerated fashion but also there was a prolonged shortage
of lower denomination of currency bills.
However the benefits are far reaching given the fact that
evidently there indeed was a strong push in digital payment
channels, awareness of digital banking and bringing a lot of
middle and lower income people in the banking perimeter who
had no access to any kind of banking before.
Research Implications/Limitations: It is not easy to quantify
by what percentage the GDP will drop due to demonetization
and also to quantify the benefits arising in the long term. The
exact float of black money is very hard to estimate for a country
like India as well as given the fact that demonetization was a
politically hot topic the numbers were heavily guarded. Hence
the quantification is out of scope of this study.
Originality/Value: This paper is the first attempt to find the
implications of such an event can have analyzing through time
tested frameworks like IS-LM. Retrospectively the predictions
made by IS-LM model for Indian economy based on this paper
have come true.
Keywords: Demonetization, IS-LM Model, Indian Economy,
Macroeconomics, Black Money
Paper type: Viewpoint
II. INTRODUCTION
T he central government in India decided to demonetize 500
and 1,000 currency notes[10] on 8th November 2016.
Electronic copy available at: https://ssrn.com/abstract=3139917
Technical definition of demonetization is when the government
of a country ordains that the currency unit has lost its status as
legal tender. Historically demonetization has happened when
there was a change of national currency like European Union
when multiple countries in the euro zone accepted Euro as their
official currency. Typically the old unit of currency is gradually
retired and replaced with a new currency unit. The
demonetization that has happened in India is different in the
sense that 86%[14][17] of the entire currency float has been
rendered invalid overnight. Out of this total float rendered
invalid, in value terms Rs 500 notes constituted almost 45% of
the currency in circulation while 39% of the notes were of the Rs
1,000 denomination[14][17]. Citizens of India had little less than
two months to exchange the currency notes now deemed invalid
with the new ones issued by the central bank, Reserve Bank of
India (RBI). By all means, for a common man, this was an event
that one is lucky to witness, but unlucky to experience. The
underlying goal of the demonetization exercise was to address
the parallel economy of black money rampant in the country and
to targets the float of black money in the Indian economy.
However such demonetization also leads to far reaching
macroeconomic consequences that are more complex and
convoluted for an economy and whose effects only start to abate
in medium to long term. This paper tries to explore such
consequences and why the stakeholders in such an economy
would like to pay attention to it.
III. GOALS OF DEMONETIZATION
The stated goal of the demonetization exercise was to get rid of
or impair the parallel economy driven by black money in the
country. Black money can be understood through the matrix in
Figure 1 [11]. Money can be earned through legitimate means or
through illicit means like crime, smuggling, terrorism and
corruption. Now an individual can pay taxes on both such
incomes. Payment of taxes on legitimate income is straight
forward, transparent and easily auditable. However illegitimate
income is generally mixed in a stream of white money
commonly known as money laundering which is then eventually
taxed thus erasing all the evidence of source and now leading to
white money. For such money I introduce a new term “gray
money” that is very hard for the crime preventers to identify as it
has been laundered. However when we consider the total float of
black money in an economy it important we consider this gray
portion as well though it is very challenging to estimate it.

Figure 1
After the initial week of the demonetization
announcement as the weeks passed and government gained
confidence in this endeavor several new goals got added with
some of them listed below:
Cashless Economy: There is now a huge thrust seen from the
government to push towards a more digital economy and make
use of more and more electronic means to complete transactions
and address business needs.
Check on Counterfeit Notes: The last 500 currency notes were
introduced in 1997 and last 1,000 currency notes were
introduced in 2000. India has been a subject to belligerent
neighbors that try to pump counterfeit notes to damage the
Indian economy. The new notes not only render the old
counterfeit ones invalid they also make it difficult to make
counterfeits of the new currency notes due to advanced security
features.
Get Everyone to have a Bank account: Money deposited in
banks after demonetization has been phenomenal. If a person has
a bank account the exchange of notes is far easier as compared to
people with no account. An indirect advantage of this is also that
tax and government agencies will be able to keep a watch on
people.
However with 27.78 people who are illiterate per 100 of
people in India [12] and 21.59 people who are still without
access to mobile device[13]. Clearly this poses a big challenge to
the move to digital economy.
IV. MACROECONOMIC VIEW
Keynes gave us three motives why a citizen of a country holds
the currency of that country:
1. The Transactions Motive
Demand for money arising from the use of money in
making regular payments. The cash inflow and cash outflow
for a person is not synchronized. You will never receive
cash at the same time when you have to pay it out to
someone else. So to cover this lag people hold money.
2. The Precautionary Motive
Electronic copy available at: https://ssrn.com/abstract=3139917
This demand for money arises because people are uncertain
about the payments they might want or have to make.
Realistically an individual or institution doesn‟t always
accurately know what payments will be made and when and
when and how much of receipts will come in. The more
money an individual holds the less likely he or she is to
incur the costs of illiquidity (costs that arises due to not
having money on hand). However the more money a person
holds the more interest they forego as well. So there is a
trade-off.
3. The Speculative Motive:
For cash based economy like India, cash still is the safest
asset one can hold. An individual typically has a portfolio of
investments. Some of these investments are risky and in a
way that an individual might not even be aware of the kind
of risks she or he might be exposed to. To cover losses that
might arise from holding such assets or to use cash in case
of an investment need that might yield high retunes in short
term (think of physical gold rush), people like to keep some
cash in hand. This leads to lesser opportunity losses.
However the primary motive of a currency out of
the three motives discussed above is to be able to carry out
transactions. That‟s why the currency came into existence
in the first place. Depending on which class of society a
citizen belongs to and what are their saving rates the
importance of a motive for currency usage may differ. For
example for a daily wage earner it would be mostly
transactional. Now demonetization has been such an event
that has made the other two motives if not equally
important than more important than before for all classes
of people of India. Most of the transactions happen in the
lower denomination currency which has now become
scarce. Note that lower denomination currency represented
mere 14%[14][17] of the total currency float. With the rest
of the entire currency invalidated it is not easy on ground
level to continue to carry out transactions. People are not
sure if they will be able to make the payments, be able to
meet their liabilities as they arise and hence due to this
uncertainty, hoarding of lower denomination notes and
deferment of consumption to save this hoard had started to
take place.
Effects in Short Term
An immediate effect of the demonetization is to suck a lot
of currency out of immediate circulation. No government
in the world can replace 86% of currency in circulation
with new one on near short term basis. This feat becomes
even tougher when the goal is to address the black money
as then you cannot involve a lot of entities to this event
without leaking the agenda so readiness becomes a
challenge. Also such a feat becomes even more
complicated with a developing country where most of
transactions are cash based.
I will use the IS-LM model to evaluate the effect on Indian
economy. The IS-LM model continues to be in use today,
70 years after it was introduced, because it provides a
simple and appropriate framework for analyzing the effects
of monetary and fiscal policy on the demand for output and
on interest rates.
Effect on Marginal Propensity to Consume (MPC)
Now even though citizens use currency to consume goods
and services, in cash based economy where higher
currency notes are no more valid, think of lower
denominations of the currency also as a commodity which
citizens would hoard as it has become scarce. Now this
doesn‟t mean that they don‟t want to spend on their needs
but they would rather defer the spending if they could on a
lot of discretionary items. This leads to our first major
effect on economy in terms of Marginal Propensity to
Consume (MPC). A lower marginal propensity to consume
or lower private consumption results in a flatter aggregate
demand curve and consequently a steeper IS Curve [1].
At the same time Reserve Bank of India (RBI, which is the
central bank of India) had announced and gave a firm
indication in early December 2016 that it will not lower the
interest rates as was bring expected by a lot of experts and
financial institutions. Even though on the retail side Indian
banks are still contemplating a rate cut but the overall
atmosphere is to keep the interest rates intact.
For the goods market to clear at the same interest rate it
means that the IS curve will become steeper. In terms of
income there will be a decrease which basically translates
to a lower GDP for the economy.
This can be deduced as below. The equation of IS Curve is:
𝑖 = (𝐴 / 𝑏) – (𝑌 / 𝛼𝐺 𝑏) (1)
In this equation for the interest rates to be constant in the
economy and with no changes in government multiplier,
since „b‟ has decreased in value the slope of the IS curve
becomes steeper.
Figure 2
Due to demonetization there is a reduction in money
supply. This is a side effect of this event and not a targeted
monetary policy action. The reason being that people made
deposits before the expiration deadline of the old currency
notes but limited replacements were made with newer
currency due to scarcity of new denomination currency
bills. Shortage of lower denomination bills, quota on ATM
and bank withdrawals, leading to lesser than the desired
real balances left with citizens. The demand for real
balances depends on the level of income and the interest
rate, both of which have not changed. To meet this demand
the Reserve Bank of India controls the money supply and
generally money supply doesn‟t change drastically and is
taken as a constant for economic considerations.
The demand for real balances is given by the equation:
𝐿 = 𝑘𝑌 – ℎ𝑖 (2)
Due to demonetization there is a significant pressure on the
money supply and hence the MS curve moves to left in the
short run from 𝑀𝑆1 to 𝑀𝑆2 as shown in Figure 2. Since
RBI has decided to keep the interest rates constant money
markets can‟t clear on 𝑖2 hence as per equation (2) 𝑘, ℎ and
𝑖 are constant. To maintain the equilibrium between money
supply and money demand the money demand curve shifts
downwards from 𝐿1 to 𝐿2 putting pressure on income,
output and GDP (𝑌).
Next we will see how due to shift in MS curve to left and
given 𝑖 as constant the LM curve shifts left as well and the
overall money market clears at the same interest rate but a
decreased output and GDP 𝑌2 .
Figure 3
To find the new equilibrium in the money markets we look
at the LM curve. The original equation for LM curve is
given by:
𝑖 = 1/ℎ (𝐾𝑦 – 𝑀/𝑃) (3)
However in this case the money supply is no more a
constant in the short to medium term and has decreased
hence in order for the interest rates to remain constant in
the economy the output will suffer. This is shown as a shift
of the LM curve to the left and the decrease in output from
𝑌1 to 𝑌2 in Figure 4.
Figure 4
The IS-LM model explains the interaction between goods
and assets markets. Spending, interest rates and income are
determined jointly by equilibrium in the goods and assets
markets. Bringing the IS-LM curves together (to look at
the goods and assets market jointly) as in Figure 5 we will
see that economy clears at the same interest rate but the
GDP decreases from 𝑌1 to 𝑌2 .
In this decrease of output (𝒀) the contribution due to
lesser private consumption is from 𝒀𝟏 to 𝒀′𝟏 and
contribution due to a decrease in money supply is from
𝒀′𝟏 to𝒀𝟐 .
Figure 5
RBI maintains status-quo on Interest Rates
An important action that was taken by Reserve Bank was
to keep the interest rate constant even though when a lot of
experts and financial institutions were expecting it to lower
the interest rates under such a windfall of deposits.
Generally it wouldn‟t happen that both monetary and fiscal
policies are leading to unpredictable shifts in IS-LM
curves. The situation now in India however is the one
where both the curves have moved and central bank needs
to address this situation and bring back output to its
equilibrium level. One aspect is being addressed by
printing lot of new currency or replacement notes to flood
the market. Once confidence of, citizens of India will be
back it should bring back the IS curve to its normal pre-
demonetization levels. Once money supply comes to its
normal level to address the shift in IS curve RBI has fixed
the interest rates to the pre-demonetization level to address
the shift in the LM curve. In the light of what has been
proposed by Rudiger Dornbusch, Stanley Fischer, Richard
Startz[1] if output deviates from its equilibrium level
mainly because the demand-for-money function shifts
about, the central bank should operate monetary policy by
fixing the interest rate. If the initial output then was Y*
then it continues to be Y* once private consumption is back
to normal.
Importance of lower denomination Notes
The government had discontinued the old 1,000 and 500
Rupee notes and brought new 2,000 and 500 Rupee notes.
Now even though the new 2,000 Rupee notes satiate the
need for precautionary motive and speculative motive for
citizens they fail to satisfy the transaction motive for a
normal person coming from a middle section society in
India. The reason being the average cash transaction size in
2013 in India was mere Rs. 186[15] which if we account
for today based on an average inflation rate of 6.0%[16]
compounded over three years comes to Rs. 221.52 in 2016.
This is still too low, just a little over 10% of Rs. 2,000 note
value. Since the government and RBI were not able to
supply enough 500 Rupee notes in short term the hoarding
behavior towards lower denomination notes did not abate
and it well continued to suppress MPC. Even though 2,000
Rupee note can replace the invalidated money float faster
thus pushing the money supply towards its pre-
monetization equilibrium levels, and hence the LM curve
but this will still fail to correct the slope of IS curve due to
a suppressed MPC. The only solution is to print and bring
more and more 500 Rupee notes faster than before.
Effects in Long Run
To recall from earlier section in this paper the squeeze on
money supply had a side effect on reducing the Marginal
Propensity to Consume (MPC). So the combined effect of
lower MPC and decreased Money Supply (MS) which are
the main factors driving the GDP down will be addressed
simultaneously in the long run when the government and
Reserve Bank are able to restore the supply of currency
notes. Citizens gain back confidence in the central entities
to be able supply notes and hence will also start using and
circulating more and more lower denomination notes (the
hoarding behavior starts to mellow down), as well as the
Marginal Propensity to Consume (MPC) will start
increasing. The Money Supply (MS) starts moving back to
its pre-monetization level and eventually people will have
the desired level of real balance of money with them.
These phenomenon will lead the output and income to
increase gradually to the pre-monetization levels. The
speed with which this recovery happens is mostly
dependent on how sooner and how easily the lower
denomination currency is again available including the 500
currency note.
V. PERIPHERAL EFFECTS
The ban of currency notes which has invalidated
86%[14][17] of the India‟s currency has led to few
peripheral benefits as well. Although government may or
may not have thought about them but some of them will
have multiplying effects (positive and negative but mostly
positive) in the years to come and India will reap the
benefits.
1. GDP and Productivity Loss: Restricted money supply
and a lower marginal propensity to spend (MPS) will
lead both the goods and money markets to clear at a
equilibrium level of output that is lower than current.
Most likely the GDP will downward sticky for some
time to come before the mindset of people start to
change and they stop hoarding lower denomination
notes. The challenge for the central bank now is how
sooner it can print enough currency that can satiate
people‟s desire to hoard some currency and then
circulate as well. Until then the pressure on the output
and income will continue to be present.
2. Loss for Financial Sector: The core job of banking
sector is to helping finance and deployment of capital to
positive, value creating projects and companies.
However for the foreseeable future a huge effort of
banks will go in currency exchange and management
and this will for sure hamper their earnings and
productivity.
Secondly, for all the deposits that have come
into banks as part of the demonetization exercise,
between the period of 27th November 2016 and 7th
December 2016 banks were supposed to maintain a
100% CRR ratio which fundamentally means that they
will have to park all these deposits with the Reserve
Bank of India and cannot loan out these deposits.
However they still need to pay interests on their
deposits. The banks earn their money on net interest
income (NII) which is the difference in the interest
amount they get and they have to give on deposits.
Since there they cannot lend these deposits out to earn
interest on them but they are still paying interests on
them it is going to hurt their earnings until Reserve
Bank
3. Daily Wage Earners and Labor Market: As per
Institute of Human Development (IHD) [8] around 30
percent of the entire labor force in India is a daily wage
earner. This share of labor has negligible know how of
digital banking as most of them are not even primary
educated. Also many of them are still being paid in old
currency notes which add to their dilemma to go to
work or go to bank to exchange the old notes. The day
they go to bank to exchange the currency notes no more
valid, they are not welcomed to their work place as the
jobs are easily replaceable and there is no contractual
obligation by the employer to keep the employee on his
rolls. On top of this their employers are still paying
them in old scrapped notes as most of them receive
salary in cash as they don‟t have a bank account and are
still not a part of formal banking system. They are even
missing fundamental Know Your Customer (KYC)
documents hence are turned away by banks when they
approach them to get their currency changed. The only
silver lining here is that this is now finally “forced” this
class of society to understand the importance of
documents and financial system and they are trying to
become a part of it but at a cost they shouldn‟t be
bearing in the first place.
4. Digital Transactions: For a lot of people who were
either hesitant or lacked impetus to try the digital
wallets or electronic payments, this ban has led them to
explore new ways to make payments. The thing about
electronic payments is that they are sticky in nature,
given the convenience. Once one starts to use them they
realize the benefits then there is a little they would go
back to cash based transactional lifestyle.[6] For a big
 mass this has also led to awareness (in fact for the first
time) that there is a parallel way of transacting in
absence of cash. Within hours of cash ban two of the
foremost digital wallet companies in India saw rise in
registrations, volume and wallet balances jumping by a
multiple of 12 times of average before ban.
5. Decrease in RBI’s Liabilities: Every currency note
issued by Reserve Bank of India shows up as a liability
on its balance sheet as per schedule (4) of the liabilities
on its balance sheet[9]. RBI at any given point in time
accurately knows how many notes of what
denomination are in circulation. With the recent
demonetization when the denominations of 500 and
1,000 are being retuned and can only be exchanged
until 30th December 2016, once this deadline passes
RBI will again know how many of these denominations
have come back and how many still remain with
general public (in form of black money or otherwise).
The difference between the two is the currency that has
become useless and RBI no more has to respect it as a
legal tender. In short words it is no more a liability of
Reserve Bank of India and can be written off its books.
6. Reduction in Fiscal Deficit: Any country‟s
government earns by taxing income and then makes
expenditures based on these earnings. Any leakage in
taxes leads to a reduction in earnings which can either
lead to lesser public investment and government
expenditures threatening GDP growth or issuing debt to
finance the deficit between the government expenditure
and earnings. Indian government has to service this
fiscal debt with a significant amount of money going
just towards interest payments on them. First with the
income declaration scheme a lot of black money got
taxed and now with the currency ban more of this
money will get declared leading the government with
more money to spend and pay-off its debt.
7. Actions by Reserve Bank of India: First a surge of
deposits have happened all over the country across the
banking sector. Second the consumption has been hit
due to lack of cash (lower marginal propensity to
spend) indirectly bringing inflation down even if it is in
the short term [3]. Third American economy has
continually shown improvement with FII now starting
to turn back home selling Indian Rupee. All three
coupled have led to an excess liquidity condition which
was promptly tackled by RBI on 27th November 2016
by asking the banks to maintain a 100% CRR ratio on
incremental Net Demand and Term Liabilities (NDTL)
received between September 16 and November 11,
2016[18]. As per the RBI data, banks have
approximately received incremental NDTL of Rs 3.11
lac crore. This additional amount, which banks have to
park in the form of CRR, will not earn any interest
(compared with around 5.75 percent earned in reverse
repo). The impact on net interest margin (NIM) will be
limited as loss of interest will be around three percent
of their NDTL (Rs 3.11 lac crore on total NDTL of Rs
109 lac crore). However this decision on incremental
CRR by RBI was soon reverted back on 7 th December
2016 giving some respite to banks [4]. The reason for
reversion was that RBI used another means at their
disposal, issuing bonds (on behalf on Indian
government) under the Market Stabilization Scheme
(MSS) to wipe the excess liquidity from the banks and
market. The primary use of this instrument is for this
purpose and the funds raised through this issue are not
available for the government for expenditure thus not
affecting the fiscal deficit. The second major action that
was taken by RBI was to keep the interest rate same.
8. Drop in Real Estate Prices: Real estate sector has
always been hand in glove with black money and has
historically served as an apt channel to park it. Tax
avoidance leads to a big percentage of transactions in
this market happening in cash. This is more so with the
case for resells and secondary housing market. With
almost every big Indian city already abundant with
inventory the ban has augmented the troubles for this
sector. With low interest rates and affordable housing, it
should bring some respite to people for whom owning a
house was still a distant dream.
9. Crime rate comes down: Leading print media[7] has
reported that crime rate in the country has suddenly
dropped down. Most of the funding that drives crime is
in form of black money and with demonetization this at
least in the short to medium term this channel has dried
up. Secondly the primary funding of criminal activities
happens in high value notes and in cash. Given the fact
that both currency and cash have dried up there is no
funding for crime and hence as a consequence the crime
rate has come down.
10. Anticipated drop in Currency Printing Costs: There
is a significant cost involved to print currency. From
special marked papers, ink, dedicated specialized
facilities and security. Even in today‟s world when a lot
of countries are looking to outsource printing currency
India is a nation that still prints all of its currency in-
house. India uses close to 22,000 metric tons of
watermarked paper every year which is imported from
Germany‟s Giesecke & Devrient and Britain‟s De La
Rue amongst others. By end of June 2016 Reserve
Bank of India supplied 21.2 billion bank notes and
printing costs came to around Rs. 3,421 crore. However
with the thrust on “Cashless Economy” and “Make in
India” the focus is to be able to produce all currency
related materials in-house as well as move the country
towards a cashless society. The good thing is with the
awareness of digital banking and transactions the
country‟s need for cash in hand (paper money) is sure
to come down giving some respite to costs incurred by
the government for printing currency. There already has
been seen a big spike across all banks in usage of
digital currency and plastic currency. A big contribution
 to this surge is by the first time users of plastic and
money as point of sale (POS) machines [5].
VI. CONCLUSION
Even though demonetization has led to severe pain and anguish
among the lower and medium class sections of the society, it
was definitely a much needed move to at least break the parallel
black money economy rampant in the country. A number of
raids, recovery by crime and tax agencies and dumping and
destruction of black money are a true testament. It is worth
noting that this is the first step that India has taken to increase its
tax base. In the long run GDP growth can either be sustained
using a larger revenue base for government or a blooming global
economy that drives the local economy using demand and
exports. Looking from this lens expanding the tax base through
demonetization seems a fair move by the Indian government.
The GDP of the country will surely be hit as explained by the
paper by the use of IS-LM model and this will also have a
compounding effect in the short to medium term. This will
happen due to due to lesser private consumption coming from
decreased marginal propensity to consume (MPC) as well as
from a decrease in money supply due to a fact that, not only the
government wasn‟t able to refurbish the demonetized currency
in an accelerated fashion but also there was a prolonged shortage
of lower denomination of currency bills.
In the long term normalization will happen and India should be
able to reap the fruits of this exercise for years to come. The
peripheral effects are mostly positive especially with more
awareness and push that has happened on digital banking and
electronic transactions. Once India has more visibility on “true
number of” tax payers and a better tax inflow it can also mean a
lower tax rate for the society.
REFERENCES
[1] Dornbusch R., Fischer S., Startz R., “Macroeconomics”, 10th ed, 228–230,
406-409
[2] NPIFP: Black money in the real estate sector: A Study. Retrieved from:
http://www.nipfp.org.in/media/medialibrary/2014/10/BLACK_MONEY__I
N_THE_REAL_ESTATE_SECTOR_A_STUDY.pdf?bcsi_scan_4af6d88c
1bf98e8a=1
[3] Kirtika Suneja (2016, Dec 15). Article Title: Wholesale prices cool to 3.15
per cent in November. Retrieved from:
http://economictimes.indiatimes.com/articleshow/55975775.cms?utm_sour
ce=contentofinterest&utm_medium=text&utm_campaign=cppst
[4] Reserve Bank of India Circular. Retrieved from:
https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10768&Mode=0
[5] Nupur Anand (2016, Nov 18). Article Title: Banks see surge in card usage;
demand jumps for PoS terminals. Retrieved from:
http://www.business-standard.com/article/economy-policy/banks-see-
surge-in-card-usage-demand-jumps-for-pos-terminals-
116111701214_1.html
[6] Rogoff K (2014), Costs and benefits to phasing out paper currency,
Harvard University. Retrieved from:
http://scholar.harvard.edu/files/rogoff/files/c13431.pdf
[7] (2016, Nov 27) Demonetization move has halved Mumbai crime rate.
Retrieved from:
http://timesofindia.indiatimes.com/city/goa/Demonetization-move-has-
halved-Mumbai-crime-rate/articleshow/55643669.cms
[8] Institute for Human Development: India Labour and Employment Report
2014. Retrieved from:
http://www.ihdindia.org/ILERpdf/Highlights%20of%20the%20Report.pdf
[9] Reserve Bank of India Balance Sheet. Retrieved from:
https://www.rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1184
[10] Reserve Bank of India Circular. Retrieved from:
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=10684
[11] Ministry of Finance, Department of Revenue, Government of India: White
Paper on Black Money. Retrieved from:
http://www.finmin.nic.in/reports/WhitePaper_BackMoney2012.pdf
[12] World Bank: India Adult literacy rate, population 15+ years, both sexes
(%). Retrieved from:
http://data.worldbank.org/indicator/SE.ADT.LITR.ZS?locations=IN
[13] World Bank: India Mobile cellular subscriptions (per 100 people).
Retrieved from:
http://data.worldbank.org/indicator/IT.CEL.SETS.P2?locations=IN
[14] Reserve Bank of India Annual Report Publication, August 2015. Retrieved
from:
https://www.rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1154
[15] Ruben Korenke, Nikhil Joseph and Benjamin D. Mazzotta
(2013), Cash Outlook: India, IBGC Working Paper 13-01, The Fletcher
School, Tufts University
[16] OECD Data on Inflation. Retrieved from:
https://data.oecd.org/price/inflation-cpi.htm
[17] Sai Manish (2016, Nov 08). Article Title: 86% of currency by value in
India are of Rs 500 and Rs 1,000 denominations. Retrieved from:
http://www.business-standard.com/article/economy-policy/86-of-currency-
by-value-in-india-are-of-rs-500-rs-1-000-denominations-
116110801416_1.html
[18] Reserve Bank of India Circular. Retrieved from:
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10744&Mode=0
AUTHORS
First Author – Kovid Bhardwaj, MBA, Indian Institute of
Management Lucknow
kovid.bhardwaj@iiml.org