The annual report of Reserve Bank of India for the year 2017-18 was released on the 29th August where it was announced that almost all of the demonetised currency notes have been counted and accounted for. The report also mentioned that Rs 15.31 lakh crore worth of Rs 500 and Rs 1000 note have been returned, since 8th November, 2016 when Prime Minister Modi suddenly announced demonetisation, sending 133 cr of India into unimaginable misery and torture which continued till the better half of 2017. This represents about 99.3 % of total Rupees 15.41 lakh crore which was in circulation at the time of demonetisation.
The same figures were quoted when RBI came out with its annual report of 2016-17 last year. The RBI has come with these figures in its last year annual report too but then it was mentioned that the figures were not final as it was supposed to undergo further round of checks. The difference between the currency notes in circulation before demonetisation and after it was returned to the RBI stands at Rs 10,720 crore and that raises lot of questions as why Prime Minister Modi opted for demonetisation in the first place.
If the difference in amount is taken as the black money component, it was almost at par with Rupees 8000 cr plus which RBI spent post demonetisation in 2016-17 on printing new Rs 500 and Rs 2,000 and other denomination notes. In December 2016, the Govt was ballistic about capturing black money worth Rupees 3 to 4 lakh crores but the final tally of currency notes which were returned tell us altogether a different story.
Another perceived benefit of demonetisation which was highly marketed by Modi Govt was its attempt to bring down the proportion of high denomination notes but that also proved a day dream because the share of Rs 500 and Rs 1000 notes, which had accounted for 72.7 % of the total currency in the circulation by March 31st 2017 increased to 80.2% by March 31st. Before demonetisation, the share of Rs 500 and Rs 1,000 note was 86% of the currency in circulation.
The total value of notes in circulation too increased to 18.04 lakh crore by March 31st 2018 which was a whopping 37.7% higher than the figure at the time of demonetisation. When Prime Minister forced the bitter pill of demonetisation on his unsuspecting people, there were three declared objectives of demonetisation; to wipe out the black money from economy, to check the circulation of counterfeit notes and to curb terrorism.
Unfortunately, none of these objectives were met and Govt kept on shifting the goal post from finding black money to making the economy digital. Owing to the scarcity of cash in the initial phases of demonetisation, for a brief period, the digital transactions were on a rise but once the supply of currency resumed, the cash transactions bounced back with a vengeance and far exceeded the levels of pre demonetisation.
It’s time Modiji should come up with a “white paper” on demonetisation which took a heavy toll on people’s lives killing more than 160 people, shutting about 10 lakh small businesses and rendering more than a crore of people unemployed. He needs to apologise to 133 cr people of this country who chose him to be their Prime Minister to make their life comfortable which was made painful and miserable in the bargain.