Posted: Updated – 03:56 PM, Sunday – November 6
Mumbai: The currency used by the public has jumped to a new high of Rs 3,088 crore as of October 21, showing that cash usage is still going strong even six years after the demonetization campaign.
Compared to the two weeks ended November 4, 2016, the currency in public circulation was 30.88 billion rupees, an increase of 71.84%. On November 8, 2016, Indian Prime Minister Narendra Modi announced his decision to withdraw the Rs 500 and Rs 1,000 denominations with the ultimate aim of reducing corruption and black money in the economy.
The move, criticized by many experts as poorly planned and executed, is aimed at making India a “cash-less” economy.
Currency in public circulation rose to Rs 3,088 crore as of October 21, according to the RBI’s bi-weekly money supply data released on Friday. The central bank’s reserve currency data shows that the currency has a circulating supply of 17.7 billion rupees. November 4, 2016.
Public money refers to paper money and coins that people use to conduct transactions, settle transactions, and purchase goods and services. The figure is derived after deducting bank cash from the currency in circulation.
The use of cash in the economy has been rising steadily, even as newer and more convenient digital payment methods have caught on. The COVID-19 pandemic, which emphasizes contactless transactions, has also inspired this digital model.
A 2019 RBI study on digital payments partially addressed this issue.
“While digital payments have gradually grown in value and volume across countries in recent years, the data also show that, at the same time, the ratio of currency in circulation to GDP has increased with overall economic growth,” it had said.
“…over a period of time, an increase in the ratio of digital payments to GDP does not appear to automatically mean a decrease in the ratio of the country’s currency to GDP,” it added.
It has said that digital transactions in India have increased significantly after demonetization, although the country’s digital payments as a percentage of GDP have historically been low.
In a recent report, SBI economists had said that currency in circulation (CIC) fell by Rs 760 crore during Diwali week, the first such drop in nearly 20 years if the 2009 celebrations were excluded . affected by the global financial crisis.
