Social impact of demonetisation may have been greater: World Bank

  •   Ricky
  •   July 31, 2017
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Social impact of demonetisation may have been greater: World Bank

Greater data availability, especially on labour markets, needed to better gauge social impact of such policies

The World Bank has said the social impact of demonetisation may have been greater as the informal economy was likely to have been hit especially hard. However, the Bank said the impact of demonetisation on the informal economy was difficult to measure and greater data availability, especially on labour markets, is needed to better gauge the social impact of such policies in the future.

In its India Development Update released on Monday, the Bank said there were “statistical issues that mask some of the impact of demonetisation on measured economic growth in Q3 (third quarter of 2016-2017).” The government had on November 8, 2016 announced that existing Rs. 500 and Rs. 1000 banknotes, corresponding to 86 per cent of India’s currency in circulation by value, had been “demonetised” – that is, ceased to be legal tender.

Greater data availability, especially on labour markets, needed to be