A UN report has found limitations of demonetization, stating that demonetization alone would be insufficient to stop the generation of black money. The report further says that a lot more efforts and initiatives would be needed to curb black money. The main argument of the report is that black money is not always found in cash and that it can be routed to any form of undeclared wealth such as property, land, jewelry, etc. The decision to demonetize Rs 500 and Rs 1000 currency notes was announced by the NDA government on November 8. It had flushed nearly 87% of the currency out of circulation and lead to various hardships for people from all walks of life.
The United Nation’s ‘Economic and Social Survey of Asia and the Pacific 2017′ states that black money in India can be anywhere between 20-25 percent of the GDP, but the cash component forms only 10% of that amount. “The measure did not, by itself, impede future black money flows in new denominations…complementary measures would be required to target all forms of undeclared wealth and assets,” the report said. However, the report also mentions some benefits of demonetization such as increased awareness about non-cash transactions and a change in peoples’ mindset related to their comfort in using digital platforms.