Demonetisation: 86% of currency voided overnight

What happened

In a televised address at 8 p.m. on 8 November 2016, the Prime Minister announced that ₹500 and ₹1,000 banknotes would cease to be legal tender at midnight — roughly 86% of all currency in circulation by value. The stated objectives were to extinguish unaccounted “black money”, eliminate counterfeit currency, and disrupt terror financing. The announcement gave the public four hours’ notice; replacement notes were not available in sufficient quantity for weeks.

What the official record found

The Reserve Bank of India’s 2017–18 annual report stated that ₹15.31 lakh crore of the ₹15.41 lakh crore in voided notes — 99.3% — had been returned to the banking system, undermining the premise that large volumes of illicit cash would be extinguished. The cash shortage that followed produced weeks of queues outside banks and ATMs; media tallies reported over a hundred deaths in connection with the disruption. Studies and official statistics recorded a slowdown in growth and severe stress in the cash-dependent informal sector, while the cost of printing replacement currency ran into thousands of crores.

Where it stands

In January 2023 a Constitution Bench of the Supreme Court upheld the legality of the decision-making process by a 4–1 majority, with the dissenting judge holding the procedure unlawful. The court did not rule on the policy’s wisdom or outcomes. The economic record — what the policy sought versus what the RBI’s own numbers show it achieved — is documented above.