Why India Is Now Scrambling to Print More Currency

Remigio Civitarese
Aprile 20, 2018

However, it is learnt that ATMs in some parts of the country continued to remain out of cash even on Wednesday as the Government is reportedly to have moved quickly to rush currency to meet an "unusual spurt in demand" ahead of looming polls in some States in the country.

B N J Sharma, former General Secretary of EMBEA, also said that the Government has failed to supply enough cash.

India seems to be reeling under the effects of demonetization once again as there seems to be acute cash crunch throughout India especially which started from the Southern states and which is now slowly spreading to the other states.

ATM run: Of late, the central bank's focus has shifted to printing Rs 200 notes (and other smaller denominations) but not all ATMs have been re-calibrated to dispense them.

There's a depressing sense of deja vu about similar stories pouring in of long queues of depositors outside depleted cash machines in at least five states - Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar. Meanwhile, the government and RBI have stepped up hard work to impel in more cash into states who are experiencing currency crunch. Bankers blamed RBI saying it was not supplying adequate cash despite banks demanding more currency, the report said. If anything, Rs 2000 notes can be used more conveniently as "store of value" vis-à-vis the old Rs 1000 notes.

Cash withdrawals from ATMs hit a high of Rs 2.47 lakh crore in February 2018 compared to Rs 2 lakh crore in April 2015, RBI data show. In the current month, in the first 13 days itself, the currency supply increased by Rs.45000 crores. Mr Modi's government introduced the bill in November 2016 to quickly replenish the currency taken out of circulation. The RBI clearly miscalculated the demand for currency, but was this a result of a deliberate policy decision predicated on the assumption that the economy would be less cash reliant post demonetisation? Unidentified finance ministry officials said the figure was 66% in Bihar, 77% in Telangana and 70% in Andhra Pradesh, and over 90% in Punjab, Haryana, Jammu and Kashmir, Maharashtra, North East India, Odisha and Tamil Nadu. No Rs 500 notes were supplied either between October and December 2017.

Besides, the central government announced that it has made a decision to increase printing of Rs 500 notes by five times. The 65-year old Minister has denied opposition parties" charge that an "undeclared economic emergency" has been in force in the country, with Banks and ATMs showing "no money' card to people and customers. "This may have altered the demand for smaller denomination notes in a larger way to possibly substitute for currency of larger denominations", it said.

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE