Revealing the Demonetisation Debacle

The revelation in the 2017–18 Annual Report of the Reserve Bank of India (RBI) that 99.3% of the specified bank notes (SBNs) have returned from circulation has put an end to the current government’s fanciful propaganda of demonetisation being successful in curbing black money. This is not the first time that the RBI has put out the data on returned SBNs. Earlier, in December 2016, when it was revealed that out of a total of ₹15.42 trillion worth of demonetised notes, ₹12.44 trillion had returned to the banking system, the government had refuted that these figures were inflated, possibly because the figures challenged the government’s own forecast of ₹3–₹5 trillion worth of non-returnable black money in the economy.

The RBI, simultaneously, is in an embarrassing position regarding the efficiency of its system. Just a year ago, it had disclosed that an “estimated value of SBNs received as on 30 June 2017 is ₹15.28 trillion” in its annual report. And, now, to please the government and the public at large, it is claiming that the “humungous task of processing and verification of SBNs” has been successfully achieved,” that too after almost two years. And, what is the improvement in the estimates of SBNs returned? A mere 0.2%, or, ₹15.31 trillion against ₹15.28 trillion, estimated a year ago. And, how much of high-denomination currency notes have finally not returned? Only ₹0.11 trillion (or 0.7% of the returned SBNs).