“Demonetization has failed to meets it’s objective of curbing the black money out from the system,” says the report.
On Wednesday, the Reserve Bank of India has confirmed during the release of their annual report that, over 99% of the ₹ 500 and ₹ 1000 that were withdrawn from circulation in November 2016 were returned.
According to the report, after verification and reconciliation, the total value of the ₹ 500 and ₹,1000 as on November 8, 2016, the day before note ban came into effect, was R₹15,417.93 lakh crore. The total value of the such notes returned from circulation was ₹15,310.73 lakh crore.
Similarly according to the RBI data, the value of banknotes in circulation increased by 37.7% over the year to ₹18,037 lakh crore as at end-March 2018.
With more ₹500 notes pumped into the system over the last one year, the share of ₹2,000 notes by value declined to 37.3% as on March 2018 as compared to 50.2% a year ago. The share of ₹ 500 note, in terms of value, increased from 22.5% to 42.9% during the same period.
“The share of newly introduced ₹200 banknotes in the total value of banknotes in circulation was 2.1% as at end-March 2018,” the report said.
The report also said that nearly ₹8,000 cr was spent by RBI post-DeMo.
Post demonetisation, the RBI spent ₹7,965 crore in 2016-17 on printing new ₹500 and ₹2,000 and other denomination notes, more than double the ₹3,421 crore spent in the previous year.
In 2017-18 (July 2017 to June 2018), it spent another ₹4,912 crore on printing of currency, the report said.
The demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency, but the RBI said, “Counterfeit notes detected in SBNs decreased by 59.7 and 59.6 per cent in the denominations of ₹500 and ₹1,000, respectively.”
The RBI said, “Compared to the previous year, there was an increase of 35 per cent in counterfeit notes detected in the denomination of ₹100, while there was a noticeable increase of 154.3 per cent in counterfeit notes detected in the denomination of ₹50.” Counterfeit notes detected in the new Rs 500 and Rs 2,000 notes during 2017-18 were 9,892 and 17,929, against 199 and 638 respectively in the previous year, it added.
Reacting to the RBI’s annual report for 2017-18, Former Finance Minister P. Chidambaram said the country had paid a huge price to demonetise just ₹13,000 crore.
Mr. Chidambaram added that demonetisation had caused a loss of ₹2.25 lakh crore to India’s gross domestic product (GDP).
“Indian economy lost 1.5% of GDP in terms of growth. That alone was a loss of ₹2.25 lakh crore a year. Over 100 lives were lost. 15 crore daily wage earners lost their livelihoods for several weeks. Thousands of SME (small and medium enterprises) units were shut down. Lakhs of jobs were destroyed.”
“Every rupee of the ₹15.42 lakh crore (barring a small sum of ₹13,000 crore) has come back to the RBI. Remember who had said that ₹3 lakh crore will not come back and that will be a gain for the government!?” he said, taking a dig at Mr. Modi.
Separately, the Congress asked Prime Minister Narendra Modi to tell the country who should be held accountable for the “monumental folly”.