Ten years after the withdrawal of Rs 500 and Rs 1,000 notes, the case for demonetisation rests less on what it achieved than on what it is said to have enabled. Digital payments have expanded dramatically, but the stated objectives of curbing black money, eliminating counterfeit currency and creating a less-cash economy remain unmet.Not just that. The most consequential monetary decision in independent India has never been formally evaluated. The ‘anniversary’ passed without official mention. The government chose not to revisit the exercise at all. That silence is itself a finding.How it happenedOn November 8, 2016, notes making up 86% of the value of currency in circulation ceased to be legal tender at four hours’ notice. The theory was that cash was being hoarded and that it would never return to circulation. But it did. According to the Reserve Bank of India (RBI), Rs 15.31 lakh crore of the Rs 15.42 lakh crore in specified notes, or 99.3%, came back.The expected windfall from destroyed liabilities, the mechanism on which the policy rested, no longer held water.The minutes of a meeting of the central board of the RBI, held hours before the announcement, recorded that “most of the black money is held not in the form of cash but in the form of real sector assets such as gold or real estate”. It assessed the estimated Rs 400 crore of counterfeit notes circulating in the economy as a whole “not very significant”.As Professor Jayati Ghosh has argued, most tax evasion flows through formal channels: offshore outfits or trusts and companies with opaque ownership structures. These cannot be tackled by a currency shock.A cash economy, but not a ‘less-cash’ oneAt the end of March 2026, RBI revealed that the value of banknotes in circulation was Rs 41.23 lakh crore, a 11.9% increase over a year. The cash-to-GDP ratio fell to 8.7% in 2016-17, rose to 14.4% during the COVID-19 pandemic, and is now back where it began: 12.06% in 2025-26 against 12.08% in 2015-16.Only the composition of the currency notes has changed. The Rs 2,000 denomination note, printed to re-monetise the economy, was withdrawn in 2023. A new Rs 500 note now makes up 85.5% of the value of all banknotes. This is not a ‘less-cash’ economy; it is a cash economy more concentrated in a single high denomination than before.Also read: How Modi Government Kept Changing Demonetisation’s GoalpostsThe RBI’s own researchers explain why this has happened. Digital payments have substituted for cash in transactions, but that this is outweighed by income and precautionary motives reinforcing the notion that cash survives as a store of value. Deputy Governor Shirish Chandra Murmu recently acknowledged that rising cash alongside record digital use is making currency demand harder to predict.Counterfeiting tells a mixed story. Counterfeits per crore notes fell from 70.1 in 2015-16 to 13.4 in 2025-26, but for the new Rs 500 note the rate rose from 0.3 to 20.1 and fake Rs 500 notes detected rose 20.5% in 2025-26 alone. Better security features, not a one-time invalidation, are the more plausible source of the aggregate decline, and that gain is eroding.Who paid the price?Using variation in the cash shock across districts, economists Gabriel Chodorow-Reich, Gita Gopinath, Prachi Mishra and Abhinav Narayanan found that the shortage cut employment and night lights output (real-time economic output studied by satellite data) by at least two percentage points, and bank credit by two percentage points, in the last quarter of 2016.Economist Amartya Lahiri concluded that demonetisation had “limited success in achieving its stated objectives” while imposing “appreciable costs in terms of lost jobs and output”, concentrated in the informal sector.A weaver in Varanasi’s Badi Bazaar area. He had shut down his loom due to a lack of cash. Credit: Shwetank MishraAggregate output recovered within months; households fared worse. A weekly survey of poor households in the Sundarbans estimated a welfare loss of about 15.6% of income over two months, with female headed households losing more. Field research in rural Tamil Nadu documented women forced to disclose hidden savings kept for children’s education or emergencies. No GDP series can record such losses of financial autonomy.Also read: Cash In Circulation Soared by 83% Since Demonetisation in 2016: RBI DataThe informal economy has not fully recovered. Employment in unincorporated enterprises fell from 11.13 crore in 2015-16 to 10.96 crore in 2022-23, and unincorporated manufacturing lost about 54 lakh jobs. Informal employment declined in Uttar Pradesh, West Bengal, Tamil Nadu, Karnataka and Andhra Pradesh.GST and the pandemic followed demonetisation, making it three shocks falling on the same fragile enterprises. And yet, no official exercise has separated their effects. In January 2017, India’s chief statistician said there was not enough data to measure the impact of November 8, 2016, on the GDP. A decade later, the state still has not tried to assess the impact.Assessing the digital ‘dividend’The strongest case for demonetisation is the upswing in digital payments. In October 2026, UPI processed a record 25.47 billion transactions worth Rs 31.53 lakh crore. Economists Nicolas Crouzet, Apoorv Gupta and Filippo Mezzanotti, who studied how demonetisation impacted digital payments, found that e-wallet adoption rose persistently in districts more exposed to the cash shock. But UPI was launched in April 2016, months before the note ban, and its growth owes much to cheap data, smartphones, Aadhaar linked accounts and the pandemic.The same researchers warned that such shocks can widen initial gaps in adoption. And the average UPI transaction has fallen from about Rs 3,900 in 2016-17 to about Rs 1,300: digital rails have absorbed everyday payments, not displaced cash as a store of wealth.The tax base deserves the same scrutiny. Income tax return filers rose from 3.91 crore in 2015-16 to 8.56 crore in 2024-25, but the rise coincided with GST, data matching and stronger enforcement, and filers are not payers. There is still no public account of what came of enquiries into roughly 18 lakh flagged depositors.The cost of institutional failureUpholding the demonetisation notification 4:1 in 2023, the Supreme Court held that it was “not relevant” whether its stated objectives were achieved or not. Justice B.V. Nagarathna, dissenting, found “no independent application of mind by the RBI” in an exercise completed in 24 hours, and held that parliament “cannot be left aloof” of such crucial decisions.There is a growing body of literature on regional economic development that suggests that institutional quality and the independence and accountability of those who make and check decisions shapes economic outcomes as much as the quantum of capital investment. Demonetisation shows what happens when both independence and accountability are bypassed.Also read: Newspaper Editorials Highlight Importance of Dissenting Opinion in SC’s Demonetisation JudgmentThe central bank board was barely consulted, parliament was informed after the fact and 28 states and over 766 districts were left to absorb a shock that they had no part in designing. A decision taken in New Delhi was paid for in the mandis, workshops and construction sites across the country.Economist Thorstein Veblen observed that institutions arise “through the habituation of individuals”, while Nobel laureate economist Douglass North argued that institutional change is “incremental and bound to its own history”. Neither offers comfort to those who believe an economy can be remade by proclamation. A currency can be cancelled at midnight, but not habits trust and expectations.That is why demonetisation produced not a cashless economy but a more digital one alongside an undiminished appetite for cash. That is also why the institutions that shelter black money stand where they stood in 2016.The deeper lesson, then, is that in a democracy the legitimacy of a “bold” reform rests not on how secretly it was made but on how honestly it is accounted for. Ten years ago, the rules of the game were rewritten in four hours. A decade on, the key economic players are still waiting to be told the score.Arijit Dash is a PhD scholar at the University of Cambridge. His research sits at the intersection of Economics, Environment and Law. Amrendra Pratap Singh is a Public Policy scholar pursuing an M.A. in Public Policy and Governance at Ambedkar University.