Demonetization: Five years after demonetization, do you know how much has changed in cash and digital transactions? – Demonetization five years PM Modi Know how much digital transactions have changed in cash tutd

History highlights

  • Five years have passed since demonetization
  • Announced on Nov 8, 2016

Five years of demonetization: Five years have passed since Prime Minister Narendra Modi announced the demonetization. On November 8, 2016, Prime Minister Narendra Modi announced the demonetization in the country, after which 500 and 1,000 banknotes were withdrawn from circulation as of midnight the same day. Let us know how much has changed in these five years after demonetization.

If you look at the figures, even after five years of demonetization, the trend of banknotes is increasing in the country. However, along with this, digital payment is also growing rapidly and people are embracing the cashless mode of payment.

The 500 and 1000 notes were suspended on demonetization. A few days later, the government issued a new 500 rupee note from 2000. Later, the 200 rupee note was also introduced.

After demonetization, for the following months, there was an atmosphere of panic in the country. People had to stand in long lines at banks to deposit old bills and get new bills. This was said to eliminate black money and reduce cash flow.

The circulation of currency has increased so much

According to data from the Reserve Bank, the total banknotes in circulation in the country on November 4, 2016, before demonetization, was worth Rs 17.74 lakh crore. But it increased to Rs 29.17 lakh crore on October 29 this year (2021). In other words, since demonetization, there has been an increase of around 64 percent in the circulation of banknotes in terms of value.

Compared to last year, the value of banknotes in circulation as of October 30, 2020 was Rs 26.88 lakh crore. That is, the circulation of banknotes increased about 8.5 percent in the last year during the Corona period.

According to data as of March 31, 2021, the 500 and 2000 rupee banknotes represent 85.7 percent of the value of the total banknotes in circulation in the country. However, it is also true that no new Rs 2,000 banknotes were printed during 2019-20 and 2020-21.

Especially in the last financial year 2020-21, the circulation of banknotes has increased significantly. The reason for this is that during the Kovid crisis, many people, being vigilant, took out a lot of cash so that there would be no more problems.

Digital transactions also increased

According to a report from a news agency, during this period there has been an increase in digital transactions in the country. Credit and debit cards, net banking, and the unified payment interface have increased digital payment by all means. UPI also started in 2016. In October 2021, this resulted in transactions worth approximately Rs 7.71 lakh crore. If we look at the numbers this month, a total of 421 million transactions took place.

The demonetization had an immediate effect

There was a cash shortfall due to demonetization. On November 4, 2016, the circulation of banknotes in the country stood at Rs 17.97 lakh crore. After demonetization, on November 25, 2016, it was reduced to Rs 9.11 lakh crore. After the withdrawal of the 500 rupees and 1000 rupees banknotes in November 2016, the currency with the people, which was 17.97 lakh crore rupees on November 4, 2016, was reduced to 7.8 lakh crore rupees in January of 2017.

money back in the system

In a report from the Reserve Bank of its year 2018, it was said that after demonetization, about 99 percent of the currency returned to the system. Not only this, even in many sectors such as real estate, the cash transaction has not been reduced. A pilot survey conducted by the Reserve Bank of six cities in December 2018 and January 2019 revealed that people prefer cash to transactions for routine expenses.

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