3 ms·
Indian demonetization has irreparably harmed the economy for decades at the very least. It absolutely halted growth and immediately led to a much lower growth
by addicted 4y ago
Indian demonetization has irreparably harmed the economy for decades at the very least.
It absolutely halted growth and immediately led to a much lower growth level from which India has not recovered, and possibly never will, at least under the current government.
And with high inflation (even pre pandemic) and a huge young population, the destruction of growth was an absolute disaster for India which absolutely needs to cash in on its youth right now before they all grow old and need to be financially supported themselves.
- pjc50 4y agoHow did the demonetization halt growth? Can this be untangled from other world economy effects?
- pcthrowaway 4y agoI guess the parent is arguing that taking fraudulent, counterfeit, and unclaimed/unaccounted money out of the system left less capital for growth?
- thematrixturtle 4y agoThe demonetization was extraordinarily bad at doing that. Turns out when you demonetize currency, the rich and corrupt can find ways around it, while it's the poor who lose their meager savings.
- pcthrowaway 4y agoHow did the poor lose their savings? I'm not from India, I just happened to travel there while that was happening. My understanding was that everyone could wait in line to exchange their 500/1000 rupee notes for 100 or 2000 notes. The lines were long and the banks were frequently out of money to exchange from, but I thought they could also deposit it to their bank if they had one (letting the bank deal with the demonetized notes). I know there are also a lot of unbanked in India, but presumably the period for exchanging demonetized notes was long enough to allow them to exchange any cash savings they had.. was this not the case?
- doktorhladnjak 4y agoNotes could only be exchanged for 18 days with fairly low daily limits per person. And that was only if you could find a bank that had new bills after waiting in line.
- toss1 4y ago"presumably" is doing a LOT of work in that comment
- worik 4y agoA lot of people in India are unbanked
- ummonk 4y agoThe ill-conceived demonetization certainly led to a disruption to economic growth in India that outstripped global declines in growth. I'm not sure it was actually a net-negative for the long term growth of the Indian economy, as the resulting lack of trust in physical cash accelerated the digitalization of Indian money and faster adoption of e-payments with Rupay and UPI, which should improve economic growth.