Currency supply still below 50% of pre-note ban days

January 15, 2017

New Delhi, Jan 15: Almost 10 weeks after Prime Minister Narendra Modi announced the demonetisation of high-value banknotes on November 8, there are no signs of a recovery on the cash-availability front.

cash

The dramatic downward trend of the currency liquidity situation, triggered by the demonetisation of Rs 500 and Rs 1,000, valued at around Rs. 15.44 lakh crore, has continued, despite the government’s claims to the contrary.

Latest weekly data released by the Reserve Bank of India (RBI) on Friday revealed that the currency in circulation as on January 6 was just over 49% of the volume of money that was with the public four days before Modi announced the demonetisation drive.

As against Rs. 17.74 lakh crore that was in circulation on November 4 last year, the money in circulation on January 6 was Rs 8.73 lakh crore, according to the data.

The figures reveal that the money in circulation has continuously dropped week after week since early November. There is no recovery yet to regain even levels close to the pre-demonetisation days.

Experts familiar with the situation told DH that the recovery depended on the capacity to print new notes and then effectively distribute them across the country through banking channels.

On both the fronts, there have been severe limitations so far, they added.

In view of the sharp decrease in the availability of cash in the economy, the RBI is yet to ease the existing rules on the post-demonetisation restrictions on cash withdrawals from banks and ATMs.

The experts said, going by the trend so far, it will take at least eight to 10 weeks to restore a semblance of normalcy with regard to currency circulation, after the first signs of recovery are available.

Unless the currency circulation vastly improves, experts feel that the economy will not recover. The government and international banks have already pegged down the GDP growth figures. However, they said that the currency circulation need not be restored to the Rs 17.74 lakh crore of the pre-demonetisation period.

“There was a portion of black money hoarded in cash... Most of that has now entered the banking system in the form of deposits made with demonetised banknotes,” one expert said.

In view of this, it is reckoned that a new currency normalcy could be achieved with a circulation level of around Rs 2 lakh crore below the pre-demonetisation level of circulation.

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April 13,2024

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New Delhi: Seventeen Indians are on board an Israeli-linked container ship that has been seized by the Iranian military amid heightened tensions between Iran and Israel.

Official sources said India is in touch with Iranian authorities through diplomatic channels, both in Tehran and in Delhi, to ensure the welfare and early release of the Indian nationals.

The Iranian action came amid increasing fears that Tehran may launch an attack on Israeli soil in retaliation to a strike on the Iranian consulate in Syria 12 days ago.

"We are aware that a cargo ship 'MSC Aries' has been taken control by Iran. We have learnt that there are 17 Indian nationals onboard," said a source.

"We are in touch with the Iranian authorities through diplomatic channels, both in Tehran and in Delhi, to ensure security, welfare and early release of Indian nationals," it said.

Reports said Iran's Islamic Revolutionary Guards seized MSC Aries on Saturday morning when it was sailing through the Strait of Hormuz.

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April 22,2024

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The BJP has opened its account in the ongoing Lok Sabha elections. The party's candidate from Gujarat's Surat constituency, Mukesh Dalal, has won the polls as all his opponents are now out of the fray.

BJP's Mukesh Dalal elected unopposed from the Surat Lok Sabha seat after all other candidates withdrew from the contest, the party's Gujarat unit chief CR Paatil said today. Today was the deadline for withdrawing nominations.

The nominations of the Congress party's Surat candidate and his substitute were rejected by the returning officer over alleged discrepancies in paperwork, a development that the Congress called an attempt at "match-fixing".

"Surat has presented the first lotus to Prime Minister Narendra Modi. I congratulate our candidate for Surat Lok Sabha seat Mukesh Dalal for getting elected unopposed," Mr Paatil posted on the microblogging website X, referring to the BJP's election symbol.

Eight candidates - seven of them independents - and Pyarelal Bharti of the Bahujan Samaj Party (BSP) withdrew their papers.

The nomination papers of the Congress's Surat candidate Nilesh Kumbhani was rejected on Sunday after the district returning officer Saurabh Parghi found discrepancies in the signatures of the proposers.

The nomination form of Suresh Padsala, the Congress's substitute candidate from Surat, was also found invalid.

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Congress lawyer Babu Mangukiya said the party will approach the high court and the Supreme Court for relief.

Congress leader Jairam Ramesh in a post on X said the Surat developments indicate "democracy is under threat". "Our elections, our democracy, Babasaheb Ambedkar's Constitution - all are under a generational threat. This is the most important election of our lifetime," Mr Ramesh said.

Mr Ramesh alleged the "distress" of micro, small and medium enterprise (MSME) owners and the business community in PM Modi's "Anyay Kaal" and their anger have "spooked the BJP so badly that they are attempting to match-fix the Surat Lok Sabha polls, which they have won consistently since the 1984 Lok Sabha elections."

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April 25,2024

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The Election Commission of India on Thursday announced that it had taken cognisance of violations to the Model Code of Conduct by both Prime Minister Narendra Modi and Congress leader Rahul Gandhi.

While Modi has indulged in a diatribe against Muslims, without naming them, using terms like 'infiltrators' and 'those with more children', Rahul has been accused of making a false claim about 'rise in poverty'.

Both the BJP and INC have raised allegations of causing hatred and divisions based on caste, religion, language, and community, ANI reported.

While the EC had initially refused to comment on Modi's speeches, sources had told PTI that the commission was 'looking into' the remarks made by the BJP leader.

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