'99% of scrapped notes returned to banks'; Jaitley says effect of demonetisation “extremely positive”

In its annual report released on Wednesday, the country’s central bank said Rs 15.28 lakh crore of the scrapped note had come back into the banking system, leaving only Rs 16,050 crore out.

About 99 per cent of the Rs 500 and Rs 1,000 notes have returned to the banking system, RBI said. 
 
In its annual report released on Wednesday, the country’s central bank said Rs 15.28 lakh crore of the scrapped note had come back into the banking system, leaving only Rs 16,050 crore out.
 
As of 8 November 2016 — the day when the government announced demonetisation — there were 1,716.5 crore pieces of Rs 500 notes and 685.8 crore pieces of Rs 1,000 notes in circulation, which in total was Rs 15.44 lakh crore.
 
As per the report, RBI spent Rs 7,965 crore in 2016-17 on printing new Rs 500 and Rs 2,000 and other denomination notes, which is more than double the Rs 3,421 crore spent in the corresponding previous year.
 
According to the report, the banking system detected 762,072 pieces of counterfeit notes in 2016-17. The amount could be worth less than Rs 50 crore, and only 20.4 per cent higher than the previous year. 
 
As demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency, opposition parties took the opportunity to question the efficacy of the government's exercise. 
 
The Congress veteran leader and former finance minister P Chidambaram said, "RBI 'gained' Rs 16000 crore, but 'lost' Rs 21000 crore in printing new notes! The economists deserve Nobel Prize." 
 
Samajwadi Party leader Naresh Agarwal said his party would move a privilege motion against RBI governor Urjit Patel for misleading a parliamentary panel on the issue.
 
Finance Minister Arun Jaitley, however, strongly defended demonetisation move, saying the impact of the note cancellation had been “extremely positive” in multiple areas. 
 
He replied to Chidambaram’s accusations that the note ban exercise had failed badly to achieve its objectives. “It is unfortunate those who have never fought against black money and, when in power, never took a single step against black money, tried to confuse the object of the demonetisation exercise as to how much currency eventually gets confiscated or how much disappears.”
 
The top government officials told ET that judging the success or failure of note on the basis of currency that came back to the system was "ill-informed” and "incorrect.” 
 
The step has not only helped in formalisation of the economy, but also made it possible for the government to detect several anomalous transactions, these officials said.
 
Source: ET.com, Media reports

Event date: 
Thursday, August 31, 2017

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