Demonetisation 5 years on, India still remains cash crazy

5 years ago on November 8, the Modi government unceremoniously pulled out 86% of the nation's currency in circulation putting an end to Rs 500 & 1000 notes. But half a decade later the results of the demontisation 'dhakka' remain unclear as India continues it's mantra of 'Cash is King.'

Latest data from RBI shows that cash in circulation in the country has not just jumped sharply but also hit a record high of Rs 28 lakh crore. This is a meteoric rise from the Rs 18 lakh crore that was in circulation when the 'note-bandi'was announced with the promise of curtailing black money.

The digital boost to the Indian economy however can not be over looked. Unified Payment Interface (UPI) is clocking more than 4 billion transactions every month, and annually will clock 25 billion transactions as against 15 billion in China. But many would argue that the digital payment economy acceleration has had Covid as the main impetus and not demonitisation.

Further proof of that was the results of a survey conducted by RBI on retail payment habits of individuals in six cities between December 2018 and January 2019. The central banker disclosed that the survey indicated that cash remains the preferred mode of payment and for receiving money for regular expenses.