More than two years have passed since India’s demonetization policy — which removed high denomination banknotes from the economy — became a reality. That bold move was met with a mix of support, confusion, and criticism. In an analysis we wrote in November 2017, we argued that demonetization was only part of India’s larger, strategic digital transformation. Since then, the institutional and economic evolution in India has accelerated in many ways and some of that change has been reactive and corrective.
The Ups and Downs of India’s Digital Transformation
More than two years have passed since India’s demonetization policy — which removed high denomination banknotes from the economy — became a reality. That bold move was met with a mix of support, confusion, and criticism. But demonetization was only part of India’s larger, strategic digital transformation Since then, the institutional and economic evolution in India has accelerated in many ways and some of that change has been reactive and corrective. For example, despite a significant rise in digital payments since demonetization and Indian banks having issued a billion debit cards, many Indian consumers still rely on cash transactions. Obstacles and unanticipated detours notwithstanding, India is making continuous strides towards a digital-first economy. Looking at what’s worked and what hasn’t in that transformation offers useful lessons for India watchers and policymakers alike.