A report by Washington-based think-tank Global Financial Integrity estimated that India lost $344 billion in illicit fund outflows between 2002 and 2011. PM Narendra Modi also said militants operating against India were using fake notes of Rs 500, worth about $7.50 at current exchange rates.

A very strong criticism of the scheme that came across is the possible draconian impact it can have on the rural economy. India reportedly has somewhere around 10 lakh bank branches all over India. However, there are 6.8 lakh villages alone and most of these villages are without a bank. Rural economy mostly thrives on currency transactions. Most of the population does not even have the slightest idea of banking. This is likely to come across as a huge shocker for such sections. Jan Dhan scheme, UPI/digital payment stack, and payment banks are still in the nascent stage. It will be a long time before rural India moves to completely cashless transactions. In the short term, people in rural India who have a significant amount of Rs 500 and Rs 1000 notes, but no official form of identification, will have a tough time in exchanging their notes.