Sudden demonetization of 500 and 1000 rupee notes forming a major portion of circulating currency by the Indian Government in November, 2016 is a daring step in the national interest. It created an instant chaos in the country. Besides inflicting a major blow to holders of unaccounted money and counterfeit currency, it also caused suffering for the common man. It was opposed by some on this ground. Many felt that if a short-term suffering was the price for a substantial long-term gain, it would be justified. The present study is based on secondary data from an extensive consultation of sources of information on this topic. It attempts to analyze the pros & cons and the rationale for demonetization. Amidst conflicting ideologies, politics, and self-interests dividing intellectuals, leaders and economists on this move, an unbiased approach to study the available literature on demonetization and to arrive at conclusions has been made. After short-term set-back the long term benefits are showing up. A comprehensive survey of the long-term outcomes is beyond the scope and time-frame of this study, but is a fertile ground for future research. The learning from the study would offer guidance for reforms through demonetization and the needed course-corrections. Other developing, emerging and developed economies would gain useful insights from this study when contemplating such measures