New Delhi: With the demonetisation drive completing a year today, political parties are leaving no stone unturned in painting blemishes on each other. While the government is claiming it to be a huge success, the opposition termed the drive as “loot”. RBI, on the other hand, has provided data to show that while the government aimed at going cashless with the note ban, ATM transactions has gone up by 27% since demonetisation.
Day before the first anniversary of demonetisation, Finance Minister Arun Jaitley called it a drive against black money, while former Prime Minister Manmohan Singh begged to differ and termed it an “organized loot and legalized plunder”.
The Reserve Bank of India (RBI) has, in the meanwhile, come in to indicate the real position of the economy.
Prime Minister Narendra Modi, while declaring Rs 500 and 1000 notes as illegal tenders, said the motive behind banning these high-value notes was to free the country of black money, curbing terror funding, getting rid of fake currency and fostering cashless transactions.
Jaitley on Tuesday wrote a blog saying over 110 crore transactions, valued at around Rs 3.3 lakh crore along with another 240 crore transactions, valued at Rs 3.3 lakh crore, were carried out through credit cards and debit cards, respectively. Value of transaction for debit and credit card was at Rs 1.6 lakh crore and Rs 2.4 lakh crore, respectively in the previous financial year of 2015-16.
During 2016-17, National Electronic Funds Transfer (NEFT) handled 160 crore transactions valued at Rs 120 lakh crore, up from around 130 crore transactions of Rs 83 lakh crore in the previous year.
Countering the data, senior Congress leader Manmohan Singh in Ahmedabad said on Tuesday, “Cash in circulation is almost 90% of what it was when demonetisation struck last year.”
However, RBI has a different story to tell.
According to bank-wise statistics provided by RBI, while 56,17,58,639 ATM transactions were made in November 2016, the figures stood at 63,04,70,907 in December 2016, up by 12%.
Interestingly, there is also a rise of 27% in the number of ATM transactions when November 2016’s data is compared to September 2017. The volume of ATM transactions has almost doubled in the following year after demonetisation kicked in and rose to Rs 24,22,646 million.
According to the same data, transactions using point of sale (POS) machines at the end of November 2016 were 33,43,78,090, which increased by 58.9% in the next month during the same year to 53,15,44,775.
However, when compared to the September 2017 data, the spike comes down to 13.02%. The amount involved in transactions using POS machines amounted to Rs 8,91,083.7 million, an increase of 51.83% when compared to November 2016 and dipped by 16.91% in September 2017 when compared with December last year.
Therefore RBI’s data clearly indicates that cash is back in the economy and PM Modi’s dream of creating a cashless economy is in for a further delay. However, whether the 90% figure provided by Singh is rhetorical, is for us to wait and watch.