A response to an RTI query by an activist revealed that the RBI, at its 561st board meeting on 8th November 2016, had warned the government that removing high value currency notes of ₹ 500 and 1000 out of circulation is unlikely to eliminate black money from the system, as such wealth is stashed/hidden in assets like gold and real estate. The government had argued that the growth in circulation of money and that of GDP were disproportionate and that counterfeit money to the tune of ₹ 400 crores was in circulation. However, the RBI did not agree with its findings and in spite of this, the government went through with the demonetisation exercise. It was a massive failure as it did not achieve the objectives it set out to and 99% of money in circulation was returned back. The government did not even seek the advice of the Income Tax Department and ED which are the bodies in charge of dealing with black money, and if they did so, perhaps they would not have gone through with it.
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