The Modi government is still to reach its goals on demonetisation, while the impact on the unorganised and MSME players could be seen even now as the two sectors have yet to recover from the blow, economists said.

In the 2016 demonetisation, 87 per cent of the circulated currency in the form of Rs 500 and Rs 1,000 notes were taken off circulation in a span of four hours after Prime Minister Narendra Modi announced the decision at 8pm on November 8.

Arun Kumar, the Malcolm Adiseshiah Chair Professor at the Institute of Social Sciences and author of the book, Demonetisation and the Black Economy, said “of the invalidated notes worth Rs 15.41 lakh crore, Rs 15.31 lakh crore were returned”.

He said: “Demonetisation was an ill-advised action that failed to achieve any of its objectives, even after the goalposts were moved. However, it severely harmed the economy, particularly the unorganised sector.”

Kumar, a former professor at the JNU, said the much touted premise that the exercise was meant to weed out black money in the system was wrong as currency constitutes only 1 per cent of the black economy, and much of it is held in real estate and gold.

“We do not wish to go into the question as to whether the object with which demonetisation was effected is served or not or as to whether it has resulted in huge direct and indirect benefits or not. We do not possess the expertise to go into that question and it is best that it should remain in the domain of the experts,” the Supreme Court said on Monday.

Maitreesh Ghatak of the London School of Economics, whose research and policy writings mostly focus on the Indian economy, said: “The Supreme Court verdict on demonetisation is about its procedural aspect: whether the RBI was duly consulted, and not its economic impact. Decisions can be procedurally correct and not being a legal expert, I will not comment on that. But of many decisions that can be taken, whether the decision that is chosen is the best one to take and what its subsequent impact is, are very different matters.”

“I am not aware of any macroeconomist across the ideological and methodological spectrum who would have endorsed withdrawing 86 per cent of the volume of currency in circulation overnight.”