Soon after Prime Minister Narendra Modi banned usage of Rs 500 and Rs 1000 notes on November 8 last year, there was a hue and cry from experts worldwide, who deemed the entire exercise futile and felt it would lead to a slowdown in the country’s economic growth.
Fast forward six months and the country has almost completely recovered from the cash crunch, with hardly any effect on India’s economic growth, apparently.
According to RBI data, around Rs 17.97 lakh crore of currency was in circulation a month before demonetisation. Till April 28, almost 80 percent of this, which is Rs 14.32 lakh crore, is already back in the system.
A Hindustan Times report says that the total withdrawals from ATMs in March were almost equal to withdrawals in the same period last year. According to a Business Standard survey, ATMs always have cash, save for the weekends, when people find it difficult to find an active ATM.
As cash withdrawals seem to normalise, digital transactions have not seen sharp declines as was expected by some earlier.
The economic growth was also forecasted to decline in the financial year 2017 following the note ban to 6.6percent-6.8 percent. However, the economy grew at 7.1 percent in FY17, as projected by the Central Statistics Office (CSO).
While the country is no more reeling in the after affects of the note ban, the government or the RBI, have still not revealed whether the note ban was successful in getting rid of the menace of black money from the country.
They have failed to disclose how much money was deposited into the banks till December 30. However, according to media reports, almost Rs 14 lakh crore of the banned notes came to the banks, with only Rs 75,000 crore having been extinguished from the banking system.