The value of the currency in circulation (or public holding of cash) stood at Rs 32.42 lakh crore as on December 23, 2022, according to Reserve Bank data. Six years after the shock move to ban 86 percent of the currency in circulation, cash is still the king with official data showing close to doubling of cash with the public.
This compares to Rs 17.74 lakh crore worth of notes in circulation (NiC) on November 4, 2016, days before Prime Minister Narendra Modi announced outlawing of old 1,000 and 500 rupee notes to target black money and fight corruption. NiC fell to about Rs 9 lakh crore after demonetisation. Compared with January 6, 2017, the cash in circulation has seen a more than 3-fold or 260 per cent jump, while from November 4, 2016, it has seen about 83 percent rise.
The total value of notes returned by the public was Rs 15.3 lakh crore or 99.3 percent of the total of Rs 15.4 lakh crore of notes in circulation on November 8, 2016. This raised questions over the purpose of a shock move that triggered a sharp slowdown in the economy and put the public in hardship. The outlawed currency notes were replaced by new 500 and 2,000 rupee notes. However, the 1,000 rupee note was not reintroduced.
According to a written reply, Union Finance Minister Nirmala Sitharaman furnished in the Lok Sabha on December 19, 2022, the value of NiC fell over 20 percent at end of March 2017 to Rs 13.1 lakh crore but has been on the rise since. It rose by 37.67 percent to Rs 18.03 lakh crore on March 31, 2018. The value of NiC soared to Rs 21.10 lakh crore on March 31, 2019, Rs 24.20 lakh crore on March 31, 2020, Rs 28.26 lakh crore on March 31, 2021, and Rs 31.05 lakh crore on March 31, 2022.
The demonetisation was challenged in the Supreme Court, which on Monday upheld the legality by a majority 4:1 verdict to close the most controversial decision of the Narendra Modi government ever since he has taken over the governance.