Demonetization Impact — Definition

Definition

The 2016 demonetisation exercise withdrew legal-tender status from specified existing ₹500 and ₹1,000 notes following the announcement on 8 November. Its economic impact depended on the transition from old notes to usable replacement cash and other payment methods.

The measure affected transaction liquidity differently across households and enterprises, while deposited notes changed banking conditions and created financial records. Evaluation must separate those mechanisms from later outcomes.

The value of notes returned does not by itself prove that every deposit was lawful, that the amount was confiscated, or that any single objective of the policy was achieved.