New Delhi: uncertainty because the Covid-19 pandemic has increased demand for paper money not only in India but throughout the world, the official source said, rejected criticism that demonetization had failed to reduce cash in the economy.
Government sources say that the growth of post-demonethrough digital payment systems will eventually curb dependence on cash.
Official data shows a leap in digital payments through various modes, including plastic cards, net banking and integrated payment interfaces (UPI).
Upi of the National Pay Corporation of India (NPCI) quickly emerged as the main payment medium in this country.
UPI was launched in 2016, and transactions have developed months-to-month restrictions on several blips.
In October 2021, transactions in terms of value reached more than Rs 7.71 lakh crore or more than $ 100 billion.
421 Crore transactions were carried out through UPI in October.
The source also shows that even in the US, the total circulating currency jumped to $ 2.07 trillion by the end of 2020 – acquisition of 16 percent from the previous year, and also an increase in the biggest one-year percentage since 1945.
Liquidity demand always increased during the economic uncertainty period And because cash is the most liquid form of assets, increasing cash during a very large uncertainty period is expected, said Source, adding, the detention of greater pandemic money has become the world.
wide phenomenon.
Observing that currency demand depends on several macroeconomic factors, including economic growth and interest rates, the source said, the demand for the caution produced by the community for 2020-21 because the uncertainty of a pandemic induced is also an important factor.
In currency requests.
The current increase in currency-in-circulation (CIC) during 2020-21 has an term of value of 17.2 percent, which is in line with past trends, when viewed along with a pandemic request induced by a pandemic, said the source.
The long-term average increase in CIC over the past 20 years has been 15 percent.
As a percentage of GDP, said Source, CIC was still aged between 11-12 percent over the past decade, but a combination of greater public demand for cash and great contractions in GDP, has caused an increase in CIC as a percentage.
GDP, from 12 percent for 2019-20 to 14.5 percent during 2020-21.
According to the latest backup data, the record in the circulation in the term value jumped from RS 17.74 Lakh Crore on November 4, 2016, to Rs 29.17 Lakh Crore on October 29, 2021.
Highlighting the benefits of demonnetization, the source said, it has increased the trend to greater economic formalization and Towards an increase in payment digitalization.
Similarly, several reports show that the number of false records in the economy has decreased by 1.1 lakh between FY’19 to FY’21, so that it achieves other important goals of demonetization.
Remembering the above, the source said, it is clear that demonetization is mainly intended to eliminate black money and fake records of circulation and increase digitization with the main objective to replace the digital payment system.
These goals have been achieved but larger digitization processes are ongoing exercises, said source.
CIC’s increase now only shows that at certain points in time, cash and digitalization can live side by side and that at the time of uncertainty, such as uncertainty of a pandemic caused by Covid-19, people can make digital payments, but hold on cash as a cash Liquid assets as precautions, sources are added.
On November 8, five years ago, Prime Minister Narendra Modi has announced demonnetization of RS 1,000 and RS 500 RS and one of the main goals of unprecedented decisions is to promote digital payments and curbs black money.
Following the withdrawal of Rs 500 and RS 1,000 records that apply as part of demonetization, the government has introduced a new RS 2,000 currency note as part of reset monetization.
It also introduced a new series of Rs 500 notes.
Then, the new denomination of Rs 200 was also added.
In terms of value, part of the RS 500 and RS 2,000 banknotes together contributed 85.7 percent of the total value of banknotes circulating on March 31, 2021, by opposing 83.4 percent on March 31, 2020.