Defending his demonetisation move, which has come under criticism from economists and opposition, Prime Minister Narendra Modi on Tuesday said he had warned people about it a year ago.

“This wasn’t a jhatka. We had warned people a year before, that if you have such wealth (black money), you can deposit it, pay penalties and you will be helped out. However, they thought Modi too would behave like others so very few came forward voluntarily,” said PM Modi in interview to news agency ANI.

Prime Minister Narendra Modi on November 8, 2016 had announced demonetisation of Rs 500 and Rs 1,000 notes.

On Monday, the Narendra Modi government informed the Lok Sabha that it has not assessed the impact of demonetisation and the GST on workers engaged in the organised and unorganised sectors, including agricultural and contractual labourers, in the country.

Former CEA Arvind Subramanian ahead of the release of his book, Of Counsel: The Challenges of the Modi-Jaitley Economy, called the note ban exercise a "massive, draconian, monetary shock".

Writing in his book, he said it is not convincing to argue that the poor were willing to ignore their own hardship during demonetisation, since the rich and the corrupt were undergoing greater hardship.

On November 21, former Prime Minister Manmohan Singh termed demonetisation as a “monumental failure” and said that the National Democratic Alliance (NDA) government will never admit it.

He further said that demonetisation did not achieve any of the stated objectives. “No black money was recovered,” he added.

Earlier, on the second anniversary of demonetisation on November 8, Singh had called note ban an “ill-thought” move that unleashed havoc on the Indian economy.

However, Finance Minister, on the second anniversary of demonetisation, had said that demonetisation resulted in increasing the tax base and a higher tax collection (both direct and indirect) for the government, thereby improving its fiscal health. He had also clarified that the real purpose of demonetisation was not the confiscation of cash but to bring it to the formal economy and make the holders pay tax.

Just recently, a research paper by four economists — Gabriel Chodorow-Reich and Gita Gopinath of Harvard University, Prachi Mishra of Goldman Sachs and Abhinav Narayanan of the Reserve Bank of India — on demonetisation concluded that there was a decline of 3 percentage points in economic activity and employment in November and December 2016, which translates into a decline in the quarterly growth rate of 2 percentage points or more.

Simply put, if demonetisation had not occurred then GDP growth in the September-December 2016 quarter would have been 2 percentage points higher.

They say their results point to the likelihood of an absolute decline in economic activity at the end of 2016, which was not captured in official statistics.