Demonetization is ‘legal,’ yet there is still much dispute.

It’s fortunate that the protracted argument over whether the Modi government’s demonetization notification on November 8, 2016, was legitimate has finally been resolved. A Supreme Court Constitution panel dismissed as many as 58 petitions with a 4:1 divided decision. It claimed there was no legal problem with the demonetization of the Rs. 500 and Rs. 1,000 notes through a gazette notification.

According to the ruling, the government and Reserve Bank (RBI) had six months of consultation, and the notification satisfied the ‘proportionality’ test, meaning that the measure of demonetization was appropriate for the desired objective, such as the eradication of black money and terrorism financing. It’s significant that not everyone agreed on the choice.

‘The RBI should have started the demonetisation process, not the Centre,’ said Justice B V Nagarathna, who ruled that the notification issued under Section 26 (2) of the RBI Act was illegal.

In retrospect, it can also be claimed that since the action cannot be undone, debating its’ ‘legality’ six years later is pointless. The country has moved on after the outcome of the decision. Because of this, even the judge who dissented from the majority has agreed with her colleagues that demonetisation cannot be undone. Additionally, it must be noted that the Supreme Court has restricted its rulings to addressing the constitutionality of demonetisation. It has shrewdly refrained from opining on whether the course of action was wise or correct.

As a result, the larger discussion over demonetisation will undoubtedly continue, and for good reason. With as much as 99.3% of the currency in Rs 500 and Rs 1,000 notes returned to the RBI’s vaults, the primary goal—to uncover dirty money—was a failure. This contradicted the prediction that about 20%, or about Rs 3 lakh crore, would be identified as illicitly obtained black money. Although the number of digital transactions increased initially, the ‘cash economy’ has returned. Was the suffering of the country, however, worth it? Countless individuals who made a meagre living stood in lines to exchange money for days and nights.

Thousands of small and medium-sized businesses vanished without a trace because they only had cash management skills. Did the government heed the bankers’ recommendations to scrap the plan? These queries must be addressed in order to avoid making the same errors again.