What are your views on the ban of Rs 500 and Rs 1000 notes by the Indian Government? Pros cons?

The ban on Rs 500 and Rs 1000 notes by the Indian government in 2016, known as demonetization, was a significant economic experiment aimed at curbing black money, reducing corruption, and promoting a cashless economy. Here are some key pros and cons of this move:

Pros

1. Increased Digital Transactions: Demonetization led to a significant increase in digital and cashless transactions across India, which was one of the government's objectives3.
2. Short-term Impact on Counterfeiting: Initially, it disrupted counterfeit currency networks, although they quickly adapted1.
3. Tax Base Expansion: The move encouraged more people to deposit their cash into banks, potentially expanding the tax base as more financial transactions became traceable3.

Cons

1. Economic Disruption: The sudden withdrawal of high-denomination notes caused widespread chaos, leading to cash shortages, long queues outside banks, and significant economic disruption, especially in the informal sector23.
2. Ineffective Against Black Money: Most black money is not held in cash but in assets like real estate and gold, making demonetization ineffective in targeting illicit wealth13.
3. Negative Impact on GDP and Employment: The move resulted in a reduction in India's GDP growth rate and an estimated loss of 1.5 million jobs3.
4. Inequitable Impact: The poor and those without access to digital payment systems were disproportionately affected, as they relied heavily on cash transactions2.
5. Introduction of New High-Denomination Note: The introduction of a new Rs 2000 note shortly after demonetization seemed to undermine the purpose of eliminating high-denomination notes1.

Overall, while the move had some positive effects on digital transactions, it faced significant criticism for its poor planning, ineffectiveness in targeting black money, and the economic hardship it caused to many Indians.