The Reserve Bank of India (RBI) today said in its 2017-18 annual report that 99.3 per cent of banned notes were returned in the banking system after demonetisation. The report also states that the total value of money returned was Rs 15.3 lakh crore against Rs 15.4 lakh crore that was in circulation on Nov 8, 2016. Also Read - COVID-19 Hangs Over The Future Like a Spectre: RBI Monetary Policy Report
The statistics suggest that the demonetisation exercise failed to check black money, which was claimed to be one of the main aims of banning specified notes. Also Read - Goldman Sachs Lowers India's GDP Growth to 1.6% Amid COVID-19 Lockdown, Predicts RBI Will Cut Interest Rates by 50 Bps
The report states, “SBNs (specified bank notes) were received by the Reserve Bank either directly or from bank branches/ post offices through the currency chest mechanism. Verification and process in of the SBNs has been completed. The total value of SBNs in circulation as on November 08, 2016, post verification and reconciliation, was Rs 15,417.93 billion. The total value of SBNs returned from circulation is Rs 15,310.73 billion.” Also Read - COVID-19 Lockdown: RBI Extends Overdraft Facility For States, UTs
RBI also stated in the report that the credit growth has revived fuelling growth prospects in the country.
According to the report,” In the evolution of monetary aggregates, currency in circulation surpassed its pre-demonetisation level while credit growth revived to double digits from a historic low in the previous year.”
The report also stated that inflation has eased, which is a positive sign for the economy. “Indian economy exhibited resilience during 2017-18, with upturns in investment and construction. Inflation eased on a year-on-year basis in an environment characterised by high variability.”
Equity and bond markets also provided a good support to the economy in 2017-2018. “Domestic financial markets were broadly stable, with rallies in equity markets & intermittent corrections, hardening bond yields, the rupee trading with a generally appreciating bias except towards close of the year and ample liquidity in money markets.”
Transition to GST was another landmark in establishing the efficient indirect tax system. “Implementation of GST achieved another important milestone towards an efficient indirect tax structure. On the external front, the current account deficit was comfortably financed with accretions to foreign exchange reserves.”