ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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What Do We Know about Remonetisation?

Analysis of Available Data till April 2017

An analysis of publicly available data suggests that 98.8% of demonetised currency was returned to the Reserve Bank of India by 13 January 2017. The data suggests a sharp slowdown in the remonetisation process in mid-December 2016, which reached only 80% of what was demonetised by the end of April. Clearly, remonetisation has been far too slow, and its consequences on the informal economy, though invisible to official data, are a matter of serious economic, political and social concern.

The public has been curious to know how much of the high denomination currency notes that were demonetised on 8 November 2016 were subsequently returned to the banks. Officials and the ministers of the government have shifted the onus of providing answers to the Reserve Bank of India (RBI) governor. They argue that the RBI is the agency in charge of collecting the demonetised currency and issuing new currency.

The RBI governor has maintained a silence on the subject and it is said that the counting of the returned old notes is still going on. In December 2016, it was also said that there could be double counting and that has to be taken into account, implying that the matter would take time. It was also said that since the return of notes by certain specified categories was allowed till 31 March 2017, the full count could not be given at that time. Now it is several months after that date, but the data is yet to be released. In this article, we have calculated how much of the old currency has come back and what is the extent of remonetisation. These calculations are based on the data on RBIs website, RBI releases, and from the answer given to a question raised in the Rajya Sabha on 7 February 2017.

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Published On : 20th Jan, 2024

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