> The goal was to understand how much cash remained in the system
The RBI which prints the banknotes knows how much cash is in the system. I've heard a lot of nonsensical justifications of demonetization. This is by far the the worst.
> but with 6 years of hindsight doesn't seem as bad. It kicked off India's digital economy
Kick starting India's digital economy did not require bringing the physical economy to a fucking standstill.
> UPI payments went from $1.5B in October 2016, to $10B the following month.
Value of UPI transactions in October 2016 was 48.57Cr, rising to 100.46Cr in November and 700Cr in December. In November 2022, the figure is 11,90,593.39Cr.
> This triggered mass adoption of phone payment apps,
Define mass. In 2016 smartphone penetration in India was ~24%.
> In most tier-1 and tier-2 cities in India, you don't need cash or a credit card to survive.
Ah, the endless queues, the needless suffering, the lost jobs and destroyed lives, all made up for by the fact that the urban middle class now has the convenience of UPI!
> Today banks don't accept any significant amount as cash deposits and there are strict caps on annual cash transactions.
Which to repeat myself, did not require bringing the economy to a fucking standstill. And limitations on value of cash transactions aren't a new idea and predate demonetization.
> Overall, the "demonetization" event of Nov 2016 was imho a success as far as the government's objectives were concerned.
99.3% of the demonetized currency was returned and six years later, the amount of cash in the economy has doubled. It takes a special kind of willful ignorance to claim this was a success.
> This triggered mass adoption of phone payment apps,
I worked in the digital payments industry at that time. The sectoral growth was unprecedented during that period. Between Oct 2016 and Jan 2017, transaction value went up 40 times!
> UPI payments went from $1.5B in October 2016, to $10B the following month.
I stand corrected. The point I was trying to make was that it grew 600% that month, as opposed to 10-20% otherwise. To reach 140B today.
> Ah, the endless queues, the needless suffering, the lost jobs and destroyed lives, all made up for by the fact that the urban middle class now has the convenience of UPI!
It's not the urban middle class alone who have benefitted. People asking for handouts have UPI ids these days. $1.7T will flow through UPI over the next 12 months, even if you assume it stays at current levels. Credit cards would not have worked in India (if you leave out the wealthy), but UPI does.
> Which to repeat myself, did not require bringing the economy to a fucking standstill. And limitations on value of cash transactions aren't a new idea and predate demonetization.
The point is that transformation to a digital economy needs to be kick started. It'll take forever otherwise (if you study how various countries have done).
> Kick starting India's digital economy did not require bringing the physical economy to a fucking standstill.
a) How do you know, given that there's no precedent?
b) India still registered decent growth in 2016 and 2017. Economy wasn't in an "effing standstill".
The RBI which prints the banknotes knows how much cash is in the system. I've heard a lot of nonsensical justifications of demonetization. This is by far the the worst.
> but with 6 years of hindsight doesn't seem as bad. It kicked off India's digital economy
Kick starting India's digital economy did not require bringing the physical economy to a fucking standstill.
> UPI payments went from $1.5B in October 2016, to $10B the following month.
Do you have a source for this? NPCI has very different figures: https://www.npci.org.in/what-we-do/upi/product-statistics
Value of UPI transactions in October 2016 was 48.57Cr, rising to 100.46Cr in November and 700Cr in December. In November 2022, the figure is 11,90,593.39Cr.
> This triggered mass adoption of phone payment apps,
Define mass. In 2016 smartphone penetration in India was ~24%.
> In most tier-1 and tier-2 cities in India, you don't need cash or a credit card to survive.
Ah, the endless queues, the needless suffering, the lost jobs and destroyed lives, all made up for by the fact that the urban middle class now has the convenience of UPI!
> Today banks don't accept any significant amount as cash deposits and there are strict caps on annual cash transactions.
Which to repeat myself, did not require bringing the economy to a fucking standstill. And limitations on value of cash transactions aren't a new idea and predate demonetization.
> Overall, the "demonetization" event of Nov 2016 was imho a success as far as the government's objectives were concerned.
99.3% of the demonetized currency was returned and six years later, the amount of cash in the economy has doubled. It takes a special kind of willful ignorance to claim this was a success.