Former RBI Governor, Raghuram Rajan who stepped down just before the Demonetization revealed that the Narendra Modi government had never consulted the RBI during his stint over the decision of demonetization but was asked personally about it in February 2016.
Raghuram Rajan gave his view orally that although there might be long-term benefits, the likely short-term economic costs would outweigh them. He even told the government that there were alternatives to achieve the main goals. He also revealed that RBI even wrote the consequences of what would happen in absence of the adequate planning but the government went ahead with out proper planning.
Rajan in the latest interview clarified that GDP suffered about 2-2.5 Lakh Crore due to Demonetization. 15.28 lakh crore of the total Rs 15.44 lakh crore worth of currency notes in circulation returning to banks is a failure of Demonetization. This indicates Demonetization is a Political Decision without proper home work.
