Why, during election rallies in Bihar, Modi no longer mentions demonetisation, black money, corruption?
The night of November 8, 2016, stands among those in India’s democratic and economic history when a single administrative decision abruptly and deeply altered the daily lives of millions. I was on my way to a friend’s house that evening. On the way, vegetable sellers in the market looked distraught. One of them said, “All my customers are coming with ₹500 notes. I have no change left.” After speaking to a few more people, I learned that demonetisation had been announced. When I reached my friend’s house and told her, she rushed to the ATM to withdraw money, but in vain — the machines were crowded, and cash had already run out. People were rushing from one ATM to another in panic.
At exactly 8 p.m. that night, Prime Minister Narendra Modi appeared on television to announce that ₹500 and ₹1,000 notes would no longer be legal tender. He declared, “From midnight tonight, these currency notes will cease to be legal tender. These notes will become legally invalid. The ₹500 and ₹1,000 notes held by anti-national and anti-social elements involved in corruption, black money and counterfeit currency will become just pieces of paper. This step will strengthen our fight against corruption, black money, and fake currency. Those who have earned their wealth through hard work and honesty will be fully protected.”
With this announcement, about 86 percent of India’s currency in circulation was suddenly withdrawn. The decision was as much psychological as administrative. In just 43 days, the rules of demonetisation were changed 60 times. It was not merely a change of currency; it was a deep wound on the beating heart of India’s economic structure. Businesses came to a halt, and millions of small industries were shaken long before the COVID-19 lockdown. Thousands of workers lost their jobs and returned to their villages. Production declined, and employment was slashed. GDP growth dropped, and social life came to a standstill — even weddings had to be postponed. The irony was striking: while ordinary people postponed family functions, on November 16, 2016, former BJP minister Janardhan Reddy spent ₹500 crore on his daughter’s wedding.
₹2,000 notes were introduced in place of the old ₹500 and ₹1,000 notes, raising further questions. To justify the move, pro-government media even claimed that “the ₹2,000 notes contain a chip that allows them to be tracked anywhere.” In reality, even after receiving the new notes, people had money in their hands but could not buy small everyday items. For small traders, selling goods had become nearly impossible.
During those weeks of long queues, at least 150 deaths were reported by various newspapers, but the government has refused to acknowledge this figure. Not a single death related to demonetisation has been officially recorded.
The decision ultimately turned out to be a Tughlaqi decree. According to the Reserve Bank of India (RBI), out of the total ₹15.417 lakh crore worth of ₹500 and ₹1,000 notes in circulation, ₹15.310 lakh crore returned to the banks — meaning almost all black money had been turned white. The country suffered an estimated economic loss of around ₹9 lakh crore in the process.
Typically, decisions relating to currency are within the jurisdiction of the RBI, but demonetisation was implemented directly by the Prime Minister’s Office. The RBI, in its meeting held barely two and a half hours before the announcement, had clearly warned that this would cause massive disorder in the country and would not effectively curb black money or counterfeit notes. Soon after the announcement, fake notes worth ₹6 lakh were seized in Surat, Gujarat.
Prime Minister Modi’s decision, in many ways, resembled the historical journey “from Delhi to Daulatabad.” On May 19, 2023, the RBI officially announced through a press release that ₹2,000 notes would also be withdrawn from circulation, though they would continue to remain legal tender.
After demonetisation, the number of counterfeit notes increased sharply. In 2016–17, 199 fake ₹500 notes and 638 fake ₹2,000 notes were seized. In 2017–18, these numbers rose dramatically to 9,892 (₹500) and 17,929 (₹2,000). Seven years later, in 2023–24, the total number of counterfeit notes seized reached 2,22,639, including 85,711 of ₹500 and 26,035 of ₹2,000 denomination. In 2024–25, this figure was 2,17,396, with 1,17,222 fake ₹500 notes alone. These figures represent only the seized notes — the actual number of counterfeit notes in circulation remains unknown.
Corruption and Reality
The claims of eradicating corruption also collapsed. In 2016, India ranked 79th out of 176 countries on the Corruption Perception Index. By 2023, it had slipped to 93rd, and in 2024, to 96th among 180 countries — meaning corruption had actually worsened.
On November 8, 2016, Modi had said, “To free the nation from the termite of corruption and black money, another decisive step was necessary. The ₹500 and ₹1,000 notes held by anti-social elements will now be mere pieces of paper. Everything will be fine in 50 days. If not, punish me wherever you wish.”
Now, not 50 days but 3,288 days have passed. Corruption has not decreased, counterfeit notes have not stopped, and the old notes did not turn into mere paper. Instead, all of these have multiplied. Nor did Prime Minister Modi present himself at any crossroads for punishment — instead, he celebrated this decision. While people stood in endless bank queues, Modi was in Tokyo declaring, “People who wouldn’t toss even a coin into the Ganga are now throwing away their notes.” BJP spokespersons called it a “surgical strike on black money,” while the opposition termed it an economic disaster. The BJP, however, tried to celebrate it as an “Anti-Corruption Day.”
Economists’ Views
Former Chief Economic Adviser Kaushik Basu wrote in The New York Times: “The Modi government’s demonetisation decision was by no means good economics. The losses far outweighed any benefits.”
Nobel laureate Paul Krugman remarked, “Banning large currency notes will not bring any significant benefit to India’s economy. It will merely make corrupt people more cautious and push them to find new ways to launder money.”
Amartya Sen said, “The demonetisation decision is arbitrary. It undermines not only the value of money but also the banking system and the trust upon which the entire economy depends.”
Forbes magazine’s editor-in-chief Steve Forbes wrote, “Demonetisation is akin to robbing people of their own money.”
That is why today, during election rallies in Bihar, Modi no longer mentions demonetisation, black money, or corruption. Instead, he talks about infiltrators, conspiracies, and other fabricated issues. Whether demonetisation or the later lockdown, both remind us of the 14th-century episode when the capital was hastily shifted from Delhi to Daulatabad — a decision marked by chaos, disorder, and unbearable suffering for the people.
Demonetisation and the lockdown were both extensions of that tradition — where power satisfied its own ego and advanced hidden agendas, while the people paid the price with their labour, blood, and sweat. For India’s working people today, demonetisation stands recorded as an economic calamity and historical tragedy — one that history will never forget.
---
*Social worker and freelance journalist
Comments