The Supreme Court on Monday upheld the government's decision on demonetization. However, the government figures show that the demonetization in November 2016 had no visible impact on the currency in circulation (CIC) in the country. This decision has largely failed to achieve the goals for which it was taken. On November 8, 2016, Prime Minister Narendra Modi announced the demonetization of old Rs 500 and Rs 1,000 notes. One of the main objectives of the unprecedented decision by the government was to promote digital payments and curb the flow of black money.
According to Reserve Bank data, the currency in circulation (CIC) in the country was Rs 17.74 lakh crore on November 4, 2016, which almost doubled to Rs 32.42 lakh crore on December 23, 2022.
According to statistics, however, immediately after demonetization, the currency in circulation came down to around Rs 9 lakh crore on January 6, 2017. This was about 50 percent of the currency in circulation of Rs 17.74 lakh crore as on November 4, 2016.
This was the lowest level of currency in circulation in the last six years after the ban on old Rs 500 and Rs 1,000 notes. There has been a jump of almost three times or more than 260 percent in CIC (Currency in Circulation) so far as compared to January 6, 2017. This is an increase of about 83 percent as compared to 4 November 2016.
As the impact of demonetization wore off, the CIC increased week on week and reached a peak of 74.3 percent by the end of the financial year. It then recovered to around 85 percent of its pre-demonetization high at the end of June 2017.
Demonetization led to a decline in CICs of about Rs 8,99,700 crore (as on January 6, 2017), resulting in a large increase in surplus liquidity within the banking system. On the other hand, the cash reserve ratio (as a percentage of deposits with the RBI) registered a decrease of about 9 percentage points.
This was a challenge to the liquidity management operations of the Reserve Bank. The central bank used its instruments, particularly reverse repo auctions, under the Liquidity Adjustment Facility (LAF) to absorb surplus liquidity in the banking system.
CICs increased to Rs 32.42 lakh crore at the end of December 23, 2022, from Rs 31.33 lakh crore at the end of March 31, 2022.
Since demonetization, CIC has seen an increase every year except the year of demonetization. CICs declined by 20.18 percent to Rs 13.10 lakh crore at the end of March 2016 from Rs 16.42 lakh crore at the end of March 31, 2015.
It grew by 37.67 percent to Rs 18.03 lakh crore in the year following demonetization and by 17.03 percent to Rs 21.10 lakh crore at the end of March 2019 and by 14.69 percent to Rs 24.20 lakh crore at the end of 2020.
In the last two years, the pace of growth of CICs in terms of value was 16.77 percent to Rs 28.26 lakh crore at the end of March 31, 2021, and 9.86 percent to Rs 31.05 lakh crore at the end of March 31, 2022.
Explain that the Supreme Court, with a majority of 4:1, has upheld the government's 2016 decision to demonetize Rs 1,000 and Rs 500 notes.
A five-judge constitution bench of the apex court, headed by Justice SA Nazeer, said great restraint should be exercised in matters of economic policy and the court cannot substitute the discretion of the executive by judicial review of the decision.
Justice BV Nagaratna, however, disagreed with the majority judgment on the point of Centre's powers under Section 26(2) of the RBI Act, saying that the demonetization of Rs 500 and Rs 1,000 notes should be done through a law Was, not through notification.
"Parliament should have discussed the law on demonetization, the process should not have been done through a gazette notification," he said. Parliament cannot be sidelined on such an important issue for the country.
He also said that no independent views were taken from the Reserve Bank of India (RBI) before taking this decision and only their opinion was sought, which cannot be said to be a recommendation.
A bench of Justices BR Gavai, AS Bopanna, and V Rama Subramanian observed that the Centre's decision-making process cannot be flawed as the issue has been discussed by the RBI and the central government. The apex court gave its verdict on 58 petitions challenging the note ban announced by the Center on November 8, 2016.
ISRO: Sun's unsolved knots will be solved soon! Countdown begins for launch of ISRO's Sun mission 'Aditya L1'
The countdown for the launch of the Indian space agency ISRO's Sun Mission Aditya L1 has begun. ISRO said that Aditya L1 has reached the Sriharikota spaceport in Andhra Pradesh. ISRO says that Aditya
Golden Temple: The tricolor was applied on the face, then he was stopped from going to the Golden Temple, said that this is not India, it is Punjab…
A video is becoming increasingly viral on social media, in which a man is seen misbehaving with a woman in the Golden Temple. In the video, SGPC workers are preventing a woman from entering the Golden
Hera Pheri 3 makers sent a legal notice of Rs 25 crore to Paresh Rawal, but he left the film in the middle of shooting.
Paresh Rawal will no longer be Babu Bhaiya of Hera Pheri world, this one news itself brought disappointment on the faces of the fans. This was a big shock for the fans who were waiting for Hera Pheri
Virat Kohli Birthday: From scoring a half-century of centuries in ODIs to becoming a world champion, know Kohli's records
Former Indian team captain and star batsman Virat Kohli is celebrating his 36th birthday today. Kohli has achieved many achievements in his career so far and is counted among the world's great
Sonia Gandhi inaugurated 'Indira Bhawan', now 9A Kotla Road will be the new address of the Congress headquarters
Congress MP Sonia Gandhi inaugurated the new party headquarters in Delhi. During this, Congress President Mallikarjun Kharge and Rae Bareli MP Rahul Gandhi were also present with her.
Waqf Amendment Bill: AIMPLB makes a big announcement against the Waqf Amendment Bill, announces nationwide 'movement'
The All India Muslim Personal Law Board on Sunday announced a nationwide agitation against the proposed Waqf Amendment Bill. A statement issued by AIMPLB office secretary Mohammad Waqaruddin Latifi
Gaza War: Iran's President expressed confidence in India, and said- PM Modi will help in stopping the ongoing attacks on Gaza.
Prime Minister Narendra Modi spoke on the phone with Iranian President Ebrahim Raisi on Monday. The two leaders talked about the Israel-Hamas conflict. Let us tell you, the war between Israel and
World Water Day: '26 percent people in the world are unable to get drinking water, read what the UN report says
On the occasion of World Water Day, the United Nations (UN) released a report. In this report released on Tuesday, it was said that 26 percent of the world's population does not have clean drinking
Bigg Boss 19 Elimination: Another strong contestant is out of the Bigg Boss house, a big twist will come in the show.
A total of 16 contestants entered the controversial reality show Bigg Boss Season 19, including several prominent celebrities including singers, actors, and social media influencers. Shehnaaz Gill's
Terrorist Masood Azhar gets punishment for his misdeeds: 10 members of his family died in Operation Sindoor, the terrorist cried bitterly.
In Operation Sindoor, carried out by the Indian armed forces, 10 members of the family of the terrorist organization Jaish-e-Mohammed's chief Masood Azhar have died. According to media reports, Masood
