India’s Currency In Circulation In May Rises 22% Over Pre-Demonetisation Levels
India's currency in circulation in May stood at Rs 21.71 lakh crore, 22 percent higher that pre-demonetisaton levels.
According to a written reply by Finance Minister Nirmala Sitharaman in the Rajya Sabha Tuesday, currency in circulation as on Nov. 4, 2016 stood at Rs 17.74 lakh crore and has now increased to Rs 21.71 lakh crore as on May 31.
In a shock decision, the Narendra Modi government had on Nov. 8, 2016. decided to demonetised old Rs 500 and Rs 1,000 notes.
According to Sitharaman, the currency in circulation has grown at 14.51 percent year-on-year since October 2014. "As actual notes in circulation on May 31 are only 21,713.85 billion, demonetisation—followed by digitalisation and reduction of cash use in informal economy—has succeeded in reducing the notes in circulation by as much as Rs 3,408.68 billion," she said.
Demonetisation, the minister said, was done with a view to eliminate black money, curb fake currency and thereby to create deterrence to funding of terror and left-wing extremism, facilitate transition of India's non-formal economy into a formal economy and to give boost to digitalisation, among other objectives.
Sitharaman further said that as reported by the Reserve Bank of India, 7.62 lakh pieces of counterfeit notes were detected in the banking system during 2016-17, 5.22 lakh pieces in 2017-18 and 3,17,389 in 2018-19.
Hence, demonetisation resulted in curbing of the counterfeit currency, she added.
The minister further said a significant growth has been observed in digital transactions in the country post-demonetisation.
Growth of digital transactions in terms of value has increased to Rs 188.07 lakh crore in September 2018 from Rs 112.27 lakh crore in November 2016.