DEMONETISATION AND ITS UNINTENDED CONSEQUENCES: WHAT THE 2016 INDIAN CURRENCY REFORM TELLS US ABOUT THE LIMITS OF LEGAL FORESIGHT

On November 8, 2016, the government of India announced that currency notes of Rs. 500 and Rs. 1000 would no longer be a legal financial tender with immediate effect. What followed was one of the most contested economic policy experiments in modern democratic history. This research paper looks at the socio-economic repercussions of that decision, particularly the ones that nobody planned for. It argues that the demonetization decision is a telling case study in the limits of legal foresight – that is, the docility of policymakers and law to fully predict what will happen when sweeping rules meet a messy, unequal, and largely cash-dependent society. The paper sums up its stance on judicial responses, academic research, and on-the-ground accounts to make this argument.