Revealing the low efficacy of last November's demonetisation of high-value currency, the RBI said on Wednesday that of the Rs 15.44 lakh crore of notes taken out of circulation, Rs 15.28 lakh crore, or almost 99 per cent, had returned to the system by way of deposits by the public."Subject to future corrections based on verification process when completed, the estimated value of SBNs received as on June 30, 2017 is Rs 15.28 trillion," the Reserve Bank of India (RBI) said in its annual report for the last fiscal. According to the RBI, 89 million pieces of the banned Rs 1,000 totalling Rs 8,900 crore had not been returned (by March 2017) out of 6,858 million such notes amounting to Rs 6.85 lakh crore. Thus the figure not returned till end March amounted to a mere 1.3 per cent of Rs 1,000 notes in circulation before the demonetisation announcement on November 8, 2016.On that day total currency in circulation stood at Rs 17.97 lakh crore, of which 86 per cent, or Rs 15.44 lakh crore, was scrapped by demonetisation of Rs 500 and Rs 1,000 notes.The central bank did not provide separate figures in respect of the banned Rs 500 notes which had not returned. In the report on fake Indian currency notes (FICA), RBI said the past fiscal had yielded 7,62,072 pieces of FICN, which was higher than the 6,32,926 such notes seized in 2015-16.
The RBI also said that the value of banknotes in circulation declined by 20.2 percent during the year to Rs 13.1 lakh crore, reflecting the impact of demonetisation. The volume of banknotes, however, increased by 11.1 per cent, mainly owing to greater infusion of lower denomination banknotes in circulation following the demonetisation.The share of Rs 2,000 banknotes in the total value of banknotes in circulation was 50.2 per cent at end-March 2017.The RBI spent Rs 7,965 crore on printing new currency notes in 2016-17.Denying that demonetisation failed to achieve its objectives, Finance Minister Arun Jaitley on Wednesday said the measure had succeeded in reducing cash in the economy, increasing digitisation, expanding the tax base, checking black money and in moving towards integrating the informal economy with the formal one."The objective of demonetisation was that India is a high-cash economy and that scenario needs to be altered," Jaitley told reporters in New Delhi following the release of the RBI annual report for the last fiscal giving the figures, for the first time, of demonetised notes returned to the system."The other objectives of demonetisation were to combat black money and expand the tax base. Post demonetisation tariff tax base has increased substantially.
Personal IT returns have increased by 25 per cent," the Finance Minister said.Senior Congress leader P. Chidambaram on Wednesday hit out at the government and the RBI over the demonetisation decision, saying that only one percent of the junked notes had not returned to the central bank and it was a "shame."Chidambaram, a former Finance Minister, said that 99 per cent of the scrapped Rs 500 and Rs 1,000 notes had been legally exchanged and asked if the demonetisation decision of the Narendra Modi government was designed to convert black money into white. In a series of tweets, Chidambaram also said that the cost of printing new currency was more than the money gained by the Reserve Bank of India. The Congress on Wednesday sought Prime Minister Narendra Modi's apology over demonetisation, saying it had dented India's credibility and the corrupt had made windfall gains while 104 innocent people had lost their lives in the "disaster."Hinting that the RBI's latest revelations on demonetisation pointed to a "big scam", West Bengal Chief Minister Mamata Banerjee on Wednesday said the entire exercise of banning high value currencies was a "flop show".