Technically, yes. You can even just start using 100 rupee bills instead.

But what this does is adds cost to doing business secretly in cash. Also it increases the threat of government taking another bold move in the future to flush out more stores of black money. Basically, it increases the risk of operating outside official accounting, making that option more scary and less appealing.

Watch for real estate crash in New Delhi. On paper there wont be a crash but sharp growth, because the declared transaction value is about 40% of the real transactions, the remaining being in cash. With this move, declared values will move up, while actual values will move down.

A currency is useful only if you can buy products and services with it. In India, you buy things in Rupees. Tou can't buy Rupees with dollars without an ID at which point the government knows anyway it's probably just simpler to pay your taxes

There is Bitcoin though

Boils back to the same point - can you buy necessities of life in India today with Bitcoin in the short to medium term? No. So if you're accumulating black money (say you are a property developer) it will be difficult for people who buy houses to pay you.

Also remember that Bitcoin isn't really anonymous and it's fully traceable. So the police merely has to do some rubber hose type de-anonymization of which Bitcoin address was the payment made to you in and from there on, all your transactions can be back-traced.

I remember reading about the Indian government passing regulations for the tight control of Bitcoin<->₹ transactions in the country.

But there can still be Bitcoin <=> Bitcoin transactions as an alternative to Paytm et al. It's very unlikely to pick up though I guess.

Most people are only interested in Bitcoin insofar as it's convertible to a local currency. So if it's difficult to do that, it's difficult to use Bitcoin for most transactions.

Those things are more cumbersome to use than local currency. At some point it becomes cheaper to just pay your taxes.

Indeed, they can, but it's difficult to get foreign currency without valid ID. But gold is an option, even though govt have even made it mandatory to flash your ID for gold purchases.

Note that starting tomorrow, people will become progressively reluctant to accept those notes in retail transactions. It will become difficult for anyone with a hoard to exchange these notes for any other commodity.

EDIT: fixed typo "tomorrows"

It was done once before also, IIRC. Around the late 1970s. Seems to have worked. I guess it'll work given a long enough time interval, since human memory is short.

Depends on if you can find someone who's willing to take your new store of value. Part of the reason those people were able to get away with it was that those notes were regular legal tender, so I didn't have to worry about accepting them.