India shifting towards digital economy, printing of currency will reduce, says Gadkari

Union minister claimed there has been a 58% rise in cashless transactions in the past year

India is gradually shifting towards a digital economy, and printing of new currency notes will be a negligible affair within the next two years, Union minister Nitin Gadkari said, while flagging off the government’s ‘anti-black money day’ and marking the 1st anniversary of demonetisation, in the city on Wednesday.

Contrary to Gadkari’s claims, Reserved Bank of India (RBI) data revealed about 91% of the currency in circulation before demonetisation has returned to the market as of November 3, 2017. (Hindustan Times)

Gadkari said there has been a 58% rise in cashless transactions in the past year. The year 2017 saw 240 crore debit and credit card transactions amounting to Rs3.2 lakh crore. It also saw a surge in National Electronic Fund Transfer. While in 2016, there were a total of 120 crore NEFT transactions amounting to Rs83 lakh crore, these increased in 2017 to 160 crore transactions of Rs120 lakh crore, Gadkari said.

However, according to data sourced from the Reserved Bank of India (RBI), about 91% of the currency in circulation before demonetisation has returned to the market as of November 3, 2017. On November 4, 2016, Rs17.97 trillion was in circulation, and as of November 3, 2017, Rs16.38 trillion is in circulation in the economy, implying a sharp recovery in cash flow within the past one year since demonetisation. Digital transactions, however, have seen an increase.

Talking about demonetisation’s success, Gadkari said, the government is investigating 23.52 lakh bank accounts, which saw deposits Rs3,68,000 crore. It has identified 1,150 companies that were used as pools to convert Rs13,300 crore of black money into white, via 22,000 bank accounts, he said.

“Demonetisation has impacted only those with black money because their businesses and liquid money was exposed in the process. Meanwhile, it has caused minor inconvenience to the common man, but will be beneficial to the economy in the long run,” Gadkari said. In the process of demonetisation, the IT is also investigating 17.73 lakh illegal accounts or transactions, and the Pan Card numbers associated with them.

Gadkari said, “Our efforts have not only nabbed circulation of black money, but has also discouraged such transactions in the future, making the Indian economy more transparent.”

While the government has curbed Hawala transactions within the past year, Gadkari attributed the decrease in stone pelting in Kashmir and Maoist activity in the red corridor to demonetisation, citing that there is no more free flowing money in the market to fund such activities.