For people who just couldn't afford to stand in line at the bank for a week, the situation was pretty grim. Oh, and the mustache-twirlers? They simply threw out their ill-gotten gains, rather than report them. Other, more cunning criminals convinced poor people to launder their money for them in return for a small commission. You might recognize that as exactly the opposite of what the law intended to accomplish.
"A thousand cocaine-stained 500-rupee notes? Sure, I'll go change that for you."
In the end, up to 97 percent of the old bills were returned to the banks. That means the demonetization effort was pretty fucking pointless. Either there wasn't as much black money out there as the government thought, or the tax cheaters and counterfeiters had figured out ways to deposit their cash without getting caught.
Tanmay noted that mobile wallets -- aka India's answer to PayPal -- like "PayTM, MobiKwik, and others, reported spectacular hikes in their transactions," surely by total coincidence. All the Indian government succeeded in doing was stimulating the money laundering industry.
And the printing industry.
It's hard to overstate how big a clusterfuck this was for the Indian economy. Prior to demonetization, India was one of the world's great economic hopes. Thanks to the severe cash shortage -- and with many savings piles gutted -- demonetization slowed India's economic growth so much that the International Monetary Fund officially downgraded the country from "world's fastest-growing economy."
China gets to teabag them financially in addition to geographically.
And it didn't even help. According to Tanmay, the counterfeiters "responded within days" with enhanced techniques to duplicate the new bills. We're not sure what the lesson is here. Don't suddenly and inexplicably destroy all your money? We never thought that needed stating, but there you go.
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