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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News Network
May 8,2024

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Congress leader Sam Pitroda has stepped down from the post of Chairman of the Indian Overseas Congress and his resignation was accepted by the party. Congress leader Jairam Ramesh took to X and announced that Sam Pitroda had decided to resign from the key post "of his own accord".

Pitroda had been under fire over his controversial remark that Indians in the East resemble the Chinese while those in the South look like Africans.

"We could hold together a country as diverse as India -- where people on East look like Chinese, people on West look like Arab, people on North look like maybe White and people in South look like Africans. It doesn't matter. We are all brothers and sisters," Pitroda said during an interview with The Statesman.

The Congress immediately distanced itself from Pitroda's remarks, terming them "unacceptable".

"The analogies drawn by Mr Sam Pitroda in a podcast to illustrate India's diversity are most unfortunate and unacceptable. The Indian National Congress completely dissociates itself from these analogies," Jairam Ramesh said in a post on X.

The BJP also hit out at the Congress over Pitroda's remarks and termed them "racist and divisive".

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News Network
May 8,2024

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Nearly 80 Air India Express flights were canceled after the cabin crew members went on a "mass sick leave", official sources said on Wednesday.

As many as 79 international and domestic flights were canceled after about 300 senior cabin crew members reported sick at the last minute and switched off their mobile phones.

The Air India Express management is currently trying to reach out to the crew, who are protesting against the new employment term at the Tata Group-owned airline, sources said.

The cabin crew has also alleged that there was a lack of equality in the treatment of the staff after the merger with Tata Group. They claim that some staff members were offered lower job position despite clearing interviews, sources said.

"A section of our cabin crew has reported sick at the last minute, starting last night, resulting in flight delays and cancellations. While we are engaging with the crew to understand the reasons behind these occurrences, our teams are actively addressing this issue to minimise any inconvenience caused to our guests as a result," an Air India Express spokesperson said.

"We sincerely apologise to our guests for this unexpected disruption and emphasise that this situation does not reflect the standard of service we strive to provide," the spokesperson added.

Guests impacted by cancellations will be offered a full refund or complimentary rescheduling to another date, the airline said.

Several passengers took to their social media accounts and complained about the sudden cancellations of their flights. They said that they had "no information" about the cancellations.

Some "very disappointed" passengers on X said that they had reached the airport when they were informed that their flights were canceled.

"We apologise for any inconvenience. Please be informed that your flight has been canceled due to operational reasons," Air India Express said in response to one of the posts on X.

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News Network
May 10,2024

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The Supreme Court Friday granted interim bail to Delhi Chief Minister Arvind Kejriwal till June 1 in the excise policy case.

The top court, however, stated that it will be passing a detailed order over the matter soon.

On Thursday, the Enforcement Directorate had opposed the move to grant interim bail to Kejriwal saying that “any special concession” to him will “amount to anathema to the rule of law and equality… thereby creating two separate classes in the country viz. ordinary people, who are bound by the rule of law as well as the laws of the country, and politicians who can seek exemption from the laws”.

The ED had arrested Kejriwal on March 21 in the excise policy case.

“The right to campaign for an election is neither a fundamental right nor a constitutional right and not even a legal right,” the ED said, maintaining that to its knowledge, “no political leader has been granted interim bail for campaigning even though he is not the contesting candidate”.

After the ED filed its affidavit, the AAP, in a press release, said, “The legal team of Delhi Chief Minister and AAP National Convenor, Shri Arvind Kejriwal, has raised strong objection to the affidavit filed by the Enforcement Directorate opposing interim bail in the Supreme Court.”

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