People queue outside an ATM of State Bank of India to withdraw cash in Ahmedabad. Photograph: (Reuters)
Queues outside banks mean that an estimated 458 million work days are lost during the 50-day period for exchanging currency, depositing cash
The demonetisation move announced in India on November 8 may have long-term benefits, but in the short term it is costing the Indian economy billions of dollars.
According to the data released by the Centre for Monitoring Indian Economy (CMIE), the cost of people standing in a queue to change old currency notes with new ones or to deposit old currency notes into banks or to get new currency notes for use is $2.2 billion (INR 150 billion).This cost includes the expenditure on photocopying of identity proofs required for the transactions. It does not include any other incidental cost such as travel, etc.
India's black economy has been as large as 23% of India's GDP, which is about $2.384 trillion.
Corruption in India has been rampant and India was ranked 76th in Transparency International's corruption index last year. This move at demonetisation aims to clean out the black economy and curtail corruption.
An infographic that explains the cost of queues to exchange currency. (WION)