Ratio of currency in circulation to GDP has risen to 11.23 per cent as of March 2019, putting question mark over demonetisation aim.
India's
dependency on cash may slow the country's transition to digital
payments despite large numbers of internet and mobile phone
users.
For
many citizens living in rural areas, cash is still the bedrock of
daily existence because of a lack of facilities.
Sudhir
Shinde, a farmer in Satara district in Maharashtra, says he withdraws
more money from his bank than required as the money vending machine
in his village has not been operational for months.
"If
I need money urgently, I must make a 32 kilometre trip to Satara
town, which is not always possible," said the 37-year-old
sugarcane farmer Shinde, while buying fertilisers for his winter-sown
crops.
"I
always keep money in hand assuming family emergencies like
hospitalisation or any other such urgent requirements".
Prime
Minister Narendra Modi backed a shock ruling in November 2016 to
outlaw 86 per cent of cash in circulation to target undeclared "black
money" and fight corruption.
The
demonetisation got rid of old Rs 500 and Rs 1,000 banknotes and Modi
said that would boost the country's digital
economy, unearth unaccounted wealth and reduce the use of cash.
But
99.3 per cent of the junked currency is back in the banking system,
suggesting that only a miniscule portion was unaccounted illicit
money or fake currency notes, and India's addiction to cash is now,
perhaps stronger than ever.
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