RBI on Demonetisation: Of total value of demonetised notes on November 8, 2016, currency equivalent to 99.3% has been returned

Reserve Bank of India, in its 2017-18 Annual Report, has revealed that process of verification and processing of bank tes that were returned post being demonetised has been completed, and has given official figures regarding same.

VALUE OF DEMONETISED CURRENCY RETURNED:

In its annual report, India's central bank states that total value of demonetised currency, namely old Rs 1000 and Rs 500 tes, on day of demonetisation's anuncement, i.e. vember 8, was Rs. 15,417.93 billion (Rs. 15,417,930,000,000), while total value of tes, referred to as SBNs or Scheduled Banktes, that have been returned from circulation is Rs. 15,310.73 billion. This means that 99.3% of total value of demonetised currency that was in circulation at time of demonetisation, has been returned, via various mechanisms, to RBI.

annual report also elucidates its process for returned demonetised currency: 

SBNs received were verified, counted and processed in sophisticated high-speed CVPS for accuracy and genuineness and shredded and briquetted in Shredding and Briquetting system. processing capacity was augmented by resorting to night shifts (along with day shifts), working for 6 days a week, using 8 ditional machines available with commercial banks and taking 7 machines on lease from vendors.

report proceeds to reveal that tes issued by RBI increased by 26.93% between June 30, 2017, and June 30, 2018, to Rs 19,119.6 billion, "on account of continued efforts to supply equate quantity of banktes to meet transactional needs of public."

Re: India's Q1 (June-August) 2018-19 GDP estimated to have grown at 8.2% -- an all-time high for Modi government - Republic World

ON SEIZED AND CONFISCATED CURRENCY:

"With regards to currency that was seized or confiscated by law enforcement ncies or produced before a court on or before December 30, 2016, report says that it "may be tendered at any office of Bank for deposit in a bank account or exchange of value reof with legal tender", implying that such confiscated and seized currency may also be a part of Rs 15,310.73 billion that has been returned to RBI."

Or points of te regarding demonetisation:

• During year, 27.7 billion pieces of banktes were disposed as against 12.5 billion pieces previous year, mainly due to accelerated processing of demonetised currency
• As of March 2018, re were 3.36 million Rs 2000 tes in circulation, comprising 37.3% of total value of currency in circulation.
• As of March 2018, re were 15,569 million Rs 500 tes in circulation, comprising 42.9% of total value of currency in circulation. 

• Accordingly, value of banktes in circulation increased by 37.7 per cent over year to Rs. 18,037 billion as of end-March 2018. volume of banktes, however, increased by 2.1%, RBI said.

In its section regarding currency manment during year, RBI writes: 

" focus of currency manment during 2017-18 broly remained on remonetisation, processing and reconciliation of SBNs received at Reserve Bank from circulation. This humungous task of processing and verification of SBNs was successfully achieved with co-ordinated efforts put in by work force of Issue Department of Reserve Bank. process involved working in two shifts under strenuous conditions, maintaining detailed records and planning effectively without compromising on or functions of currency manment. Ceaseless efforts towards remonetisation continued during year which saw issuance of banktes of  Rs 10. and Rs 50. under new series and introduction of Rs. 200, a new demination."

CONGRESS ATTACKS MODI GOVERNMENT ON 99.3% FIGURE

release of report, and, in particular, revelation that 99.3% of currency was returned to RBI, has led Congress party to attack Modi government, despite re being demarcation regarding seized and confiscated currency, and remonetised currency. 

Randeep Surjewala tweeted:

Former Finance Minister P Chidambaram wrote:

"Every rupee of Rs 15.42 lakh crore (barring a small sum of Ra 13,000 crore) has come back to RBI. Remember who h said that Rs 3 lakh crore will t come back and that will be a gain for government!?

I suspect that bulk of Rs 13,000 crore is currency in Nepal and Bhutan and some that was lost or destroyed. So, government and RBI actually demonetised only Rs 13,000 crore and country paid a huge price.

Over 100 lives were lost. 15 crore daily w earners lost ir livelihood for several weeks. Thousands of SME units were shut down. Lakhs of jobs were destroyed. Indian ecomy lost 1.5 per cent of GDP in terms of growth. That alone was a loss of Rs 2.25 lakh crore a year."

DEMONETISATION AND ITS POLITICAL & ECOMIC EFFECT:

Demonetisation h been anunced by Prime Minister in a surprise move on evening of vember 8, 2016, with stated goal of cracking down on black money that was being hoarded outside of monetary system, and which was also being used to fuel terrorism and militants in Jammu and Kashmir. anuncement was followed by a mammoth exercise where people deposited ir invalidated tes in bank accounts or in exchange for newly issued tes. move was met with significant political opposition, with likes of Mamata Banerjee protesting immediately, while Congress party took longer to opt a position. 

Samajwi Party-Congress combine me demonetisation and related hardships ir major poll plank for critical Uttar Presh assembly elections, but it appeared to t have caught on as BJP stormed to power in state. In terms of nation's ecomy, however, twin effects of Demonetisation and GST reform that was subsequently rolled out, led to a drop in GDP growth rate, which lasted almost a year. Recent figures, however, have shown downturn to only be transient, as India has once again become world's fastest-growing major ecomy, and has surpassed France to become sixth-largest ecomy in world.