It’s been over five years since the Prime Minister announced the demonetisation of Rs 1,000 and Rs 500 banknotes to curb black money, eliminate terror funding, and promote digital payments.
Back then, the government urged the country to ride the digital wave and increase cashless transactions, one of the drivers behind the move.
However, as per the fortnightly data on money supply released by the Reserve Bank of India, the currency with the public has increased to Rs 30.88 lakh crore as on October 21. The currency in circulation is 71.84% higher than the level for the fortnight that ended on November 4, 2016, which was Rs 17.7 lakh crore then.
The jump illustrates that heavy cash usage is very much prevalent even six years after the demonetisation move. Currency with the public refers to notes and coins used to transact, settle trades, and for buying goods and services. The figure is arrived at after deducting cash with banks from the currency in circulation.
However, the State Bank of India (SBI) had recently said that the currency in circulation declined by Rs 7,600 crores during the Diwali week, the first such incident in nearly two decades barring 2009.
Many experts criticised the demonetisation move citing poor planning and execution that brought tremendous hardship to the masses of India.