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Asia Insight

Modi emerges unscathed from demonetization shock

Despite economic toll, Indian prime minister solidifies his power base

Indian Prime Minister Narendra Modi's decision last November to cancel 500- and 1,000-rupee notes sparked a nationwide cash crunch.   © Getty Images / Reuters

NEW DELHI -- "November 8 is a sad day for India." With these words to reporters on Oct. 30 Rahul Gandhi, vice president of the Indian National Congress, set out plans for a nationwide protest against a decision by Prime Minister Narendra Modi that threw the country into chaos.

Puran Chand Jain, a small-time stationery seller in New Delhi, has still not fully recovered from the shock on Nov. 8, 2016. On that day, Modi's Bharatiya Janata Party government suddenly announced the withdrawal of 500 and 1,000-rupee banknotes, removing from the economy 15.4 trillion rupees ($238.1 billion at the current rate) -- about 86% of the total value of currency in circulation.

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