Demonetisation | As of March 2017: Value of currency in circulation across all denominations fell by 20 per cent to Rs 13.1 lakh crore compared with Rs 16.4 lakh crore in March 2016
Even as the government stated that one of the reasons for demonetisation of high value currency was that it will hurt black money hoarders who stash cash mostly in high denomination currency notes like Rs 1,000, the Reserve Bank of India Annual Report released on Wednesday reveals that the value of Rs 2,000 notes, as of March 2017 stood higher than the value of Rs 1,000 notes as of March 2016.
Data further show that while there was a huge shortfall in Rs 500 notes in circulation, that of Rs 100, Rs 50 and Rs 20 went up significantly. As of March 2016, while the value of Rs 500 notes in circulation stood at Rs 7,854 billion, the circulation of Rs 500 notes dropped 62 per cent to Rs 2,941 billion as of March 2017.
However, the value of Rs 100, Rs 50 and Rs 20 notes shot up in circulation between 60 per cent and 106 per cent over that in March 2016. Overall there has been a decline in currency in circulation. While the value of currency in circulation across all denominations stood at Rs 16.4 lakh crore in March 2016, it stood lower by 20 per cent to Rs 13.1 lakh crore as of March 2017.
The government had previously stated that one of the objectives of demonetisation was to make the economy a ‘less cash’ economy. The Reserve Bank of India said in its annual report that while the volume of currency in circulation went up by 11.1 per cent at end-March 2017, the value of banknotes in circulation declined by 20.2 per cent over the year ended March 2016.
“The volume of banknotes, however, increased by 11.1 per cent, mainly due to higher infusion of banknotes of lower denomination in circulation following the demonetisation. In value terms, the share of Rs 500 and above banknotes, which had together accounted for 86.4 per cent of the total value of banknotes in circulation at end-March 2016, stood at 73.4 per cent at end-March 2017,” Reserve Bank of India’s annual report said.
“The share of newly introduced Rs 2,000 banknotes in the total value of notes in circulation was 50.2 per cent at end-March 2017. In volume terms, Rs 10 and Rs 100 banknotes constituted 62 per cent of total banknotes in circulation at end-March 2017 as compared with 53 per cent at end-March 2016,” said RBI annual report added.
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