More cash in market now
Two years completed from the demonetization day. Indian government imposed a blanket ban on the currency notes of ₹500 and ₹1000 on November 8, 2016.
The move was stated as part of curbing black money. But, till now, there is no proper data about how much black money had been seized.
However, several people have moved to digital mode of transactions since then due to lack of enough money in their hand.
While the government and opposition have their own versions, the common people see that the move did not benefit them.
Till now, several hindrances are there to go for complete digital payments like transaction charges imposed on them.
And the RBI data shows that there is more money in the market at present than before the demonetization day.
It is also revealed that the money circulation is being increased year by year at a rate of 22.2 percent. The currency in circulation was growing at 17.7 percent per year before demonetization.
The RBI data also revealed that cash worth ₹17.01 lakh crore was in circulation in India before 14 days of demonetization date i.e. November 8, 2016. It was ₹18.76 lakh crore prior to 14 days of November 8, 2018.
However, the data shows that digital transactions have gone up substantially due to demonetization. The value of card payments have been gone up from ₹ Rs 4.48 lakh crore to ₹10.6 lakh crore.
₹2,000 currency note has been introduced in place of the banned ₹1,000. And a new ₹500 has been released in place of old ₹500 currency note.
The introduction of ₹2,000 note may be one of the reasons for more money in circulation. People earlier used to withdraw cash only when they needed money. But after demonetization, due to difficulties in getting enough cash might be another reason as most of the people are keeping more money with them due to fear of lack of enough cash in hand.
Image Reference: Indiatoday