Here's what Raghuram Rajan had to say about demonetisation

Moneycontrol BureauWhile the government’s demonetisation initiative has been applauded by many for its impact on black money, former Reserve Bank Governor Raghuram Rajan had a different take on the subject. "It (demonetisation) is often cited as a solution (to get black money out of circulation). Unfortunately, my sense is the clever find ways around it," he had said at the 20^th Lalit Doshi Memorial lecture on 'Finance and Opportunity in India' in August 2014.

Rajan believed it is not that easy to flush out the black money. "They (people) find ways to divide up their hoard in to many smaller pieces. You do find that people who haven't thought of a way to convert black to white, throw it into the Hundi in some temples. I think there are ways around demonetization,” an article by The Huffington Post said quoting Rajan.

Rajan also noted that a fair amount of the black money is in the form of gold which is even harder to track.

Instead, the focus, according to Rajan, should be taxes that prove to be among the major incentives to generate and retain black money. While noting India’s tax rates are fair and drawing attention to the high tax rates in some other countries, he said he would prefer to focus more on tracking data and better tax administration to get at where money is not being declared. "I think it is very hard in this modern economy to hide your money that easily."