All Said and Done, Demonetisation Has Not Been a Success: Raghuram Rajan

Raghuram Rajan, the former Governor of the Reserve Bank of India who exited in less than ideal circumstances, has said that demonetisation has not been an economic success.

New Delhi: Raghuram Rajan, the former Governor of the Reserve Bank of India who exited in less than ideal circumstances, has said that demonetisation has not been an economic success. 

“So, I think all said and done, it would be fair to say the intent was good. But certainly at this point, one still cannot in anyway say it has been an economic success. But again, as I said, only time will tell,” Rajan said in an interview to the Times of India.

Rajan said that the costs of demonetisation were substantial: GDP has suffered between 1 and 2 percentage points, as much as Rs 2.5 lakh crore; people standing in line; the printing cost of the new currency; the cost to the banks of withdrawing the money etc. 

“I think the people who mooted this must have thought that some of it would be compensated if money didn't come back into the system. The fact that 99% has been deposited certainly does suggest that aim has not been met,” Rajan said.