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Extended Summary:

How I Knew Demonetisation Was Going To Be A Disaster Right From Day 2.

The recent past has seen even the biggest supporters of prime minister Narendra Modi concede that demonetisation was a disaster that the country could have done without.

As per this data, the growth for the non-government part of the economy crashed to 5.

In fact, even the 5.

The trouble is that anyone who had any basic understanding of economics or had read up on some economic history, would have known this from day one.

As a freelance writer, I am expected to react to things as soon as they happen.

But from Day 2 onwards, I went back to basic economics to essentially say that demonetisation would turn out to be bad for the Indian economy as it eventually has.

The prisoners used to receive standard food parcels from the Red Cross during the war.

As soon as the rations arrived, prisoners used to start exchanging them.

But gradually cigarettes went way beyond the status of a normal commodity and became the standardized medium of exchange.

This individual eventually scaled up his business but failed, making losses of a few hundred cigarettes.

[iii] In such situations, there was not enough money (i.

Since people did not have cigarettes to buy goods, those who were hoarding food, toiletries, and so on, had to cut prices in the hope that they are able to make a sale.

It is a medium of exchange, a unit of account and a store of value.

to carry out economic transactions, with the buyer paying money to the seller every time he sells a product or a service.

And when a war camp ran out of cigarettes, or there was a shortage, the economy inside the camp collapsed or slowed down considerably.

Demonetisation at one go rendered 86.

Hence, the rupee's function as a medium of exchange came to a standstill.

In fact, even now the currency in circulation is at 84 per cent of the currency in circulation that prevailed before demonetisation.

people haven't been able to carry out economic transactions.

Along, similar lines prices of agriculture produce, have collapsed since demonetisation, as cash in agriculture trade has dried up.

Anyone who understood the functions of money, would have argued along similar lines.

Some have even built models to show the success of demonetisation.

And without that economy grows slower or contracts.

This means people still prefer cash or they are simply not confident about spending money in any form at this point of time.

Stats For Nerds:

Original Length 6918

Summary Length 2473

Summary Ratio: 64.25

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