Out of every 100 notes in circulation, 85 were either a 500 rupee or 1000 rupee denomination. Per Govt. report most non-reported (black) transactions were done

Out of every 100 notes in circulation, 85 were either a 500 rupee or 1000 rupee denomination. Per Govt. report most non-reported (black) transactions were done using 500/1000 notes (black money - not reported to escape tax). The 500 also happened to be the most counterfeited one. By removing the 500/1000s it is now much more difficult to do cash transactions involving large amounts (imagine the cash one had to carry now becomes 5-10 times). But when doing the above, the govt. also affectively removed 85% of cash from the market - banks did not have enough cash to remit their users. However since then there is increase in cash printed and things are beginning to come back to normal. Decline in commerce is true, but is also expected short term. As others have posted, things are coming back to normal. The daily cash with drawl is increased from 4K to 10K. People like me are hopeful about a system with more transactions happening online and black money being more difficult to hoard.