What is the real advantage of Demonetization if it does not solve the problem of black money in India?
There was no advantage of Demonetization.
Apparently, Modi wanted to do something against corruption, but, also wanted to keep his voters, party members, and donors unharmed as corruption comes mostly from politicians and businessmen. In the end, nothing improved, and only sufferers were poor people who had to stand in the queue for hours to get their currencies changed from the bank.
Another reason may have been that Modi wanted to show some kind of feat or charisma by popping a new idea. But, that proved to be a futile attempt in the end.
A better approach would have been to attempt to restrict the use of cash and to increase use of cards. But, that wouldshould have been introduced gradually and by stages. In that way, the government would have been able to track the paths of flows of money very easily.
What was the logic of introducing a note of higher denomination(Rs 2000)?
Currencies of higher denominations is generally a sign of inflation.
- The 100 trillion dollar bank note that is nearly worthless
- How 9 Countries Saw Inflation Evolve Into Hyperinflation
In the case of India, the introduction of a higher currency note isn't clear to me.