Crux of the Matter
Of the value of Rupees 15.41 trillion, Rupees 15.3 trillion or 99.3% was deposited back in the system during the demonetization drive.
Demonetization aimed at curbing black money, counterfeiting currency notes, terror funding, et al.
The aim of ‘cash-less‘ economy seems a little far away as cash in the economy in March-2019 was 120% of what it was in March-2016 in value, and 128% of what it was in March-2016 in volume.
The total collection of counterfeit notes is down by 50% in 2018-19 compared to 2016-17. However, RBI data says that counterfeiting of newly introduced notes of Rs. 200, 500 and 2,000 have substantially risen to 12,728, 21,865, and 21,847 respectively in 2018-19.
UPI payment, since introduction in 2016-17, has increased in value (in Rupees billion) from 69 to 8770 in 2018-19, overtaking the individual values of Credit Cards and Debit Cards.
The analysis shows that post demonetization investment as a % of GDP was also down to ~ 3% in FY 17 from ~ 7.5% in FY 16.
The sluggish Indian economy is still dealing with the repercussions of demonetization and GST.
Curiopedia
Demonetisation – On 8 November 2016, the Government of India announced the demonetization of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series. It also announced the issuance of new ₹500 and ₹2,000 banknotes in exchange for the demonetised banknotes. The Prime minister of India Narendra Modi claimed that the action would curtail the shadow economy and reduce the use of illicit and counterfeit cash to fund illegal activity and terrorism. Read More
Curated Coverage
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