India Spend's Abhishek Waghmare interviews Praveen Chakravarty, Visiting Senior Fellow at IDFC Insitute, on demonitisation and it's prospects and perils. Exceprts below:
"The chaos was inevitable… There were 15 billion notes of 500 rupees and 6 billion notes of 1000 rupees on the 8th of November. On the 9th of November, this became invalid; useless paper. Now let’s assume, just for understanding purposes, that every 500 rupee note has to be exchanged for five 100 rupee notes. Which means nearly 75 billion new 100 rupee notes have to be printed. The annual printing capacity of all the printing presses of the RBI is 25 billion. This is just to give you a sense, if every 500 rupee note is to be changed into five 100 rupee notes, it would’ve taken 3 years of printing capacity to print the equivalent number of 100 rupee notes. This is the extreme example. Granted we don’t have to print so many 100 notes... All cash is not black and all black is not in cash. This is not demonitisation, this is old for new..."
Watch the whole video here.