50 days of demonetisation: The final goodbye to Rs 500, Rs 1000

As the year comes to an end, it is also time to say final goodbye to the old Rs 500 and Rs 1000 notes. After Prime Minister Narendra Modi announced that these two notes were no longer valid as legal tender on November 8,  the country slid into complete chaos as the ensuing cash crunch adversely affected people.

Today is the last day for people to exchange the old Rs 500 and Rs 1000 notes at banks. Tomorrow onwards, anyone holding Rs 500 or Rs 1000 notes could be levied hefty fines. Prime Minister Modi, in a speech, had requested people to give him 50 days to bring things back to  normal and described demonetisation as a bitter pill to fight black money and terrorism.

Even though the 50 days deadline now comes to an end, the cash crunch which has resulted in long ATM queues across the country are not likely to end soon. The Reserve Bank of India is struggling to put out enough cash back in the market to bring back things to normal. Reports suggest that the bank is trying to import huge quantities of paper to print new notes but it will take time.  The government, amid the cash chaos, begun to stress on the digitalisation of the Indian economy and announced freebies for digital transactions.

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According to reports, Prime Minister Narendra Modi is expected to make another speech on demonetisation on the New Year's eve. If sources are to be believed, he will highlight the 'success' of the note ban and also announce some New Year 'gifts. It remains to be seen what these 'gifts' will be, if there are any.

Meanwhile, he also gave his first interview after demonetisation to India Today, in which he defended demonetisation. He reiterated from his speech that the short-term pain would lead to long-term gain due to demonetisation.

"This decision (demonetisation) is so huge that even our best economists remain confused in their calculations. India's 1.25 billion citizens, however, have welcomed it wholeheartedly and supported it even in the face of great personal difficulties, intuitively understanding its impact and importance," he said.
He added: "I believe India is standing at a watershed moment, on the cusp of actualising its inherent potential as a developed nation and global leader. An India which is Swachh from all forms of filth."

Prime Minister Modi's assurances aside, there is little doubt that the cash crunch that the country is facing will continue for some more time. And, until people begin to easily get access to their own money there is going to be a lot of pressure on the government.