I'm not sure it was actually a net-negative for the long term growth of the Indian economy, as the resulting lack of trust in physical cash accelerated the digitalization of Indian money and faster adoption of e-payments with Rupay and UPI, which should improve economic growth.
My understanding was that everyone could wait in line to exchange their 500/1000 rupee notes for 100 or 2000 notes. The lines were long and the banks were frequently out of money to exchange from, but I thought they could also deposit it to their bank if they had one (letting the bank deal with the demonetized notes).
I know there are also a lot of unbanked in India, but presumably the period for exchanging demonetized notes was long enough to allow them to exchange any cash savings they had.. was this not the case?
It absolutely halted growth and immediately led to a much lower growth level from which India has not recovered, and possibly never will, at least under the current government.
And with high inflation (even pre pandemic) and a huge young population, the destruction of growth was an absolute disaster for India which absolutely needs to cash in on its youth right now before they all grow old and need to be financially supported themselves.