New Delhi, June 11: Prime Minister Narendra Modi imposed Demonetisation to curb black money and hoarding of cash by the people but on the contrary Reserve Bank of India has released data showing people are hoarding large amounts of cash for various reasons.
No objective has been achieved by demonetisation rather people are hoarding more currency. The figures for both ‘currency with the public’ and ‘currency in circulation’ have also exceeded the levels seen before the government’s demonetisation decision on November 8, 2016, that saw nearly 86 per cent of the currency in circulation at that time being invalidated overnight by scrapping the then Rs 500/1,000 banknotes.
Reserve Bank of India (RBI) released data showing that people were still hoarding cash.
The latest ‘money supply’ data from the central bank puts the “currency with the public” has reached a record high level of over Rs 18.5 lakh crore on May 25, 2018 — up more than 31 per cent from year-ago level,more than double from a low of about Rs 7.8 lakh crore it had hit post-demonetisation decision in late 2016, as per RBI data.
Prior to demonetisation, the currency with the public stood at about Rs 17 lakh crore.In terms of ‘currency in circulation’, the RBI puts the latest figure at over Rs 19.3 lakh crore as on June 1, 2018 — again a jump of about 30 per cent from the year-ago level, according to the ‘reserve money’ data released by the central bank.
This high level of currency available with the public is in sharp contrast to the reported cash crunch in various parts of the country a few months ago. There has been a fear that hoarding or accumulation of large amounts of cash could have triggered an artificial currency crunch.
The incremental increase in currency in circulation, a component of the data, shows how much people are withdrawing every week and the amount of new money the RBI is supplying to banks.