POLITICS SANS ECONOMICS: COMMENTARY ON THE POLITICAL ECONOMY OF DEMONETIZATION IN INDIA

Author
Zaad Mahmood
Content Type
Journal Article
Journal
Conjuntura Austral: Journal of the Global South
Volume
8
Issue Number
41
Publication Date
2017
Institution
Conjuntura Austral: Journal of the Global South
Abstract
Demonetisation has been the contentious issue in Indian politics ever since the Prime Minister Narendra Modi, declared that Rs 500 and Rs 1000 notes would cease to be legal tenders from midnight of 8thNov 2016. Demonetisation or the withdrawal of form of currency from circulation is nothing unique as many countries have done it. In 2002 the nations of the European Union began to use to common currency of Euro and demonetised the old national currenciessuch as mark, franc and lira. In 2015, Zimbabwe demonetized its currency in response to hyperinflation. The Indian exercise, however, stands distinct to other economies due to the suddenness of the decision as the declaration and its implementation occurred in a matter of hours. The abruptness was compounded by the volume of the exercise as 86 percent of all legal tender in the country was demonetised and cash transactions constituted nearly 80 percent of all economic transactions in the country (Ghosh 2016). Naturally the decision and its implications have dominated political and electoral discourse of the country (Express Web Desk 2016).
Topic
Economics, Monetary Policy, Macroeconomics, Currency
Political Geography
India