Did Demonetisation succeed? RBI data reveals worrying currency statistics
Five years since the announcement of demonetisation by the Narendra Modi government, currency notes remain in people's pockets.
Online transactions have increased in the country. Payment apps and other online means are being used for small shopping. However, statistics narrate a different story. Five years since the announcement of demonetisation by the Narendra Modi government, currency notes remain in people's pockets. According to a report, the cash present in the market through currency payments has reached its highest level. See what the figures say...
Data from the Reserve Bank of India states that in the fortnight ending October 8, 2021, the total value of currency notes with the people was at a record high of Rs 28.3 lakh crore. This implies a 57.48 per cent (Rs 10.33 lakh crore) jump in the currency in circulation in comparison to November 2016 when demonetisation was announced. In fact, currency notes with people have shot up by 211 per cent from the sum of Rs 9.11 lakh crore recorded on November 25, 2016.
According to a report in The Indian Express citing data from the RBI, in the fortnight ending October 23, 2020, currency notes in people's hands was up by Rs 15,582 crore. RBI data suggests that the currency notes in people's hands had risen by 8.5 per cent (Rs 2.21 lakh crore) annually. After the withdrawal of Rs 500 and Rs 1,000 notes in November 2016, the amount of currency in circulation came down to Rs 7.8 lakh crore in January 2017 as compared to Rs 17.97 lakh crore on November 4, 2016.
At 8 pm on November 8, 2016, Prime Minister Narendra Modi had in his address to the nation declared the currency notes of 500 and 1000 rupees were out of circulation and not legal tender anymore. Demonetisation ensured that these notes can neither be used of any transaction nor be used to make any purchase. This method is used to eliminate counterfeit notes in the market and bring most of the money back to the banks. Demonetisation was aimed at bringing back excess money in the market. But going by reports it now appears that this may not have happened.