In 2016, Government of India announced a demonetisation of high denomination notes. What was the previous year of demonetisation?
Last updated Jun 13, 2026
Correct Answer:
Option C —
1978
Before the 2016 move, independent India had witnessed demonetisation once before in 1978 under the Morarji Desai-led Janata Party government.
History of Demonetisation in India
India has actually undergone demonetisation three times in its history:
1946 (Pre-Independence): The Governor-General of India, Sir Archibald Wavell, issued an ordinance on January 12, 1946, demonetising ₹1,000 and ₹10,000 notes to curb black marketing by businesses profiting from World War II.
1978 (Post-Independence): The High Denomination Bank Notes (Demonetisation) Act, 1978, phased out ₹1,000, ₹5,000, and ₹10,000 currency notes. The primary objective was to counter tax evasion and eliminate counterfeit currency.
2016: On November 8, 2016, the government declared ₹500 and ₹1,000 notes invalid as legal tender, replacing them with a new series of ₹500 notes and introducing the first-ever ₹2,000 denomination.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
