Exactly a month ago, the government announced a surprise recall of Rs 500 and Rs 1000 notes as part of its efforts to purge illegal money from the market and cull counterfeit currency.
Since then, millions of people have lined up outside banks and ATMs in an effort to exchange or deposit scrapped currency but been badly affected by snaking queues and a cash crunch, especially across the countryside.
Here’s a look at how Prime Minister Narendra Modi’s move – billed as the most sweeping economic decision in the past two decades – has panned out over the past 30 days.
Long queues, painful exchanges
From Day One, the culling of high-value banknotes – which made up 86% of the currency in circulation by value -- sparked chaos at banks and ATMs with long queues of people anxious to deposit old currency.
The situation has improved somewhat in certain pockets but a shortage of new Rs 2,000 and Rs 500 notes has ensured most cities and rural areas have seen little improvement. Pay Day has only added to the frenzy as several people have died in queues and out of shock.
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A young girl shows her inked marked finger after exchanging her old currency from a bank in Bhopal .
For the first couple of weeks after the note culling was announced, the government changed rules almost daily, triggering charges that the demonetisation decision had been taken with little planning.
The finance ministry repeatedly tinkered with withdrawal and exchange limits – especially with Jan Dhan accounts -- and caused outrage when it abruptly stopped the exchange of old notes.
Demonetisation’s ever-changing rules: a complete history
Demonetisation: Petrol pumps, airports won’t accept Rs 500 notes from Dec 3
New rules for old notes: From paying phone bill to school fees
Exchange of Rs 500 and Rs 1000 notes ends; can be deposited till Dec 30
RBI restricts withdrawal limit on Jan Dhan accounts to Rs 10,000
Delhi Chief Minister Arvind Kejriwal and West Bengal Chief Minister Mamata Banerjee join hands at mass rally against demonetisation of currency notes, at Azadpur Mandi in New Delhi .
The government’s decision has deadlocked Parliament’s winter session with the Congress and other opposition parties calling the demonetisation move as detrimental to the poor and farmers. Outside Parliament, West Bengal chief minister Mamata Banerjee has emerged as the face of protests.
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Hurting jobs and GDP
The Reserve Bank of India (RBI) Governor Urjit Patel attends a news conference after the bimonthly monetary policy review in Mumbai, December 7, 2016.
As it became clear that the fallout of the currency cull will not be mitigated in the short run, experts began warning of a domino effect on economic growth. The Reserve Bank of India has already shaved 0.5 percentage points off its growth forecast for 2016-17 amid a slowdown in auto, retail sector and havoc in the rural economy.
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Fake currency, ghost deposits and innovative ways to deal with the pain
The bank account of Balwinder Singh (in the foreground), a taxi driver in Punjab’s Barnala town, was accidentally credited with an amount of Rs 98,05,95,12,231.
(HT Photo )
The scrapping of high-value banknotes was aimed at junking fake currency but within days of the new notes being introduced, a number of people were caught from various parts of the country with fake notes. People also devised innovative ways to deal with the demonetisation pain, from deputing “chotus” to resorting to tricks.
Punjab: How a taxi driver got Rs 9,806 crore in his Jan Dhan account
CBI books Karnataka bank officials for illegal exchange of Rs 1.51 crore
Rs 1.5 crore in new notes seized in Goa, two detained for carrying Rs 70 lakh
Mumbai tea seller dupes bizman of Rs50L during notes exchange
Demonetisation: ‘Penniless’ foreigners resort to street performances for cash
Pay to queue up: Online service lets you hire errand boy for ATM duty
Rs 2,000 notes found on militants killed in encounter in Kashmir’s Bandipora