6 years of Demonetisation: On November 8, six years ago, Prime Minister Narendra Modi announced the demonetisation of old Rs 1,000 and Rs 500 banknotes and one of the key objectives of the unprecedented decision was to promote digital payments and curb black money, besides eliminating terror funding. As per a Reserve Bank data, currency with the public has jumped to a new high of Rs 30.88 lakh crore on October 21, indicating that cash usage is still substantial even six years after the demonetisation move. At Rs 30.88 lakh crore, the currency with the public is 71.84 per cent higher than the level for the fortnight that ended November 4, 2016.
Was this DeMo 2.0?
According to reknowned economist Anil Bokil, Rs 500 and Rs 1000 notes when discontinued, summed up to 86 percent of the total circulation and were on the rise. If the demonetisation had not happened in 2016, then in the next two-four years, the circulation of old Rs 500 and Rs 1000 notes would have reached 90 to 95 percent which in turn would have frozen country's economy. Hence, the old series notes were discontinued and the government introduced new Rs 2000 notes.
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Bokil claims that the Modi government had withdrawn Rs 2000 notes two and a half years ago which can be considered as a kind of 'demonetisation'. Because when the government introduced it, digital payment was not in common practice. With digital payments witnessing a huge jump, the government planned to discontinue printing the pink-coloured Rs 2000 notes. According to the economist, many Rs 2000 notes have been returned to the bank. Whatever left in circulation is being used in hawala and other illegal transactions.
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