Mumbai: Almost all the 500 and 1,000 currency notes that were made illegal in November 2016 have returned to the banking system, the RBI said Wednesday, prompting the opposition to question the efficacy of demonetisation in curbing black money.
Banks received `15.31 lakh crore, or 99.3 per cent, of the `15.41 lakh crore worth `500 and `1,000 notes in circulation on November 8, 2016, when the note ban was announced, it said.
This meant just `10,720 crore of the junked currency did not return to the banking system as against initial estimates of about `3 lakh crore would not return to the system as they may have been stashed away illegally to avoid tax.
After the November 8, 2016, decision, the government gave a limited period window to first exchange any old currency in possession and then deposit them in bank accounts. Also the junked currency was allowed to be used in utilities like for buying petrol and diesel at petrol pumps and paying for hospital and electricity bills as well as bus fare on state road transport buses.
The currency returned is a combination of deposits made in banks, notes exchanged and those used to pay utility bills. Post-demonetisation, RBI spent `7,965 crore in 2016-17 (July 2016 to June 2017) on printing new `500 and `2,000 and other denomination notes, and another `4,912 crore in 2017-18, according to Reserve Bank of India’s annual report for 2017-18. The printing of new currency notes reduced RBI’s profit and cut annual dividend. It transferred `50,000 crore to the government in the year to June 30, 2018, as compared to `30,659 crore in the 12 months. RBI, whose accounting year runs from July to June, had spent `3,421 crore on printing currency notes in 2015-16.
Cong demands PM’s apology
New Delhi: The Congress Wednesday demanded an apology from Prime Minister Narendra Modi for allegedly lying to the country, after the RBI said 99.3 per cent of the junked `500 and`1,000 notes have returned to the banking system. Hitting out at the Centre, the opposition party said India had to pay a “huge price” for demonetising a bulk of currency, announced suddenly by Modi November 8, 2016. Former finance minister P Chidambaram said more than 100 lives were lost and lakhs of jobs were destroyed due to closure of businesses after demonetisation. The Indian economy lost 1.5 per cent of GDP growth that accounted for a loss of `2.25 lakh crore a year, he said. Congress chief spokesperson Randeep Surjewala said the prime minister in his 2017 Independence Day speech had claimed that more than Rs 3 lakh crore unaccounted money will come back to the system. “Modiji, will you apologise for that lie now?” Surjewala asked.
Rupee slides to 70.59 against USD
Mumbai: The rupee Wednesday plunged to all-time low of 70.65 to the US dollar in day trade on heavy month-end dollar demand from importers and foreign capital outflows. The local currency dropped by 49 paise or 0.70 per cent to close at 70.59 to the dollar at the interbank foreign exchange market, logging its biggest single-day drop since August 13 when it nosedived 110 paise or 1.6 per cent. The rupee had earlier hit its all-time closing low of 70.16 Monday. Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure, dealers said. “Focus will now shift to India’s GDP and fiscal deficit data due to be released on Friday. Near-term range for the rupee is 70.20 and 70.75,” Rushabh Maru, Research Analyst, Anand Rathi Shares and Stock Brokers.
