DeMo was not meant to check rise in cash: Govt

New Delhi, December 20

The volume of notes in circulation at the end of March last year rose from 12.43 lakh (with a value of Rs 28.26 lakh crore) to 13.05 lakh (with a value of Rs 31.06 lakh crore) at the end of March this year.

More notes in circulation now

• In the year before demonetisation (2015-16), the number of notes in circulation was 9.02 lakh, valuing Rs 16.41 lakh cr
• The same at the end of March this year was 13.05 lakh, valuing Rs 31.06 lakh cr

In the year before demonetisation (2015-16), the volume was 9.02 lakh with a value of Rs 16.41 lakh crore, the government told the Rajya Sabha in a written reply on Tuesday.

The government clarified that it was its policy to move towards a less-cash economy and a digital payment ecosystem.

The quantum of banknotes that needs to be printed broadly depends on the demand for banknotes on account of inflation, GDP growth, replacement of soiled banknotes, reserve stock requirements and growth in non-cash modes of payments, it said.

The government denied that one of the objectives of demonetisation was to curb cash flow.

It referred to the gazette notification on demonetisation which said the move had a three purposes: One, contain the rising incidence of fake currency of specified banknotes, which were largely in circulation. Two, limit the usage of high denomination banknotes for storing unaccounted wealth. Three, contain the rising tendency to use fake currency for financing subversive activities such as drug trafficking and terrorism.