First, you would need to do this globally, coz we're too interconnected and independent. Otherwise for example, what will those with foreign obligations (EMIs, loan repayments) do? Same for paying for imports.
Second, govt will essentially have to nationalize everything. 1/n

Otherwise there will be preferential allocation of resources to the rich (even if they don't have cash, they can always promise to pay later). So basically we'll have to slip into communism. The problem with that is that there is really no chance of avoiding private trade. 2/n

For instance, how do you stop someone from making a deal like "I'll supply you fancy food, you gift me your gold" (which is roughly how black markets operated in the USSR)? This trade will eventually find a currency (maybe gold)... making freezing the rupee pointless.3/3