On November 8, the government announced its decision to stop the circulation of R500 and R1,000 notes. The total outstanding value of demonetised currency is around R14.2 lakh crore as of March 31, 2016. Of this, the government is expecting around R4-5 lakh crore to be unaccounted cash.
According to estimates by the Centre for Monitoring Indian Economy (CMIE), the cost of demonetisation during the 50-day window till December 30, 2016 (the deadline for converting all your old banknotes into new ones) would be R1.28 lakh crore.Businesses are expected to pay the biggest price of the demonetisation exercise, and the immediate impact could be around R61,500 crore, almost 50% of the total cost of demonetisation, according to CMIE.
According to CMIE, the government (including RBI) would have to shell out an additional R16800 crore for printing and transporting the new currency to banks. Disposing the old currency also has a cost attached to it.The households are also expected to be hit badly. The cost of demonetisation for them is estimated to be around R15,000 crore.