How many worthless Rs 1,000 and 500 notes were hoarders of black money left holding on to after demonetisation because they couldn’t reveal they had them? No official answer has been provided for eight months, leaving everybody from the common man to the Supreme Court wondering.
Now, data put out by the Reserve Bank of India (RBI) on its website suggests that at least for the Rs 1,000 notes, almost 99% of currency in circulation came back into the banking system.
The data on notes in circulation shows that at the end of March 2017, there were Rs 8,925 crore worth of Rs 1,000 notes still in ‘circulation’. According to the RBI, “notes in circulation” are all notes held outside Reserve Bank — that is by the public, banks treasuries and so on. Thus, this figure represents the total of all Rs 1,000 notes that were not deposited with the banks after note-bandi starting November 8 last year.
That might seem like a lot of money. But a look at the total value of Rs 1,000 notes in circulation on November 8 puts it in perspective. On that date, 6,858 million Rs 1,000 notes were in circulation, according to a statement made by Santosh Kumar Gangwar, minister of state for finance, in the Lok Sabha on February 3 this year. These would, thus, have been worth Rs 6.86 lakh crore.
Seen against this huge figure, Rs 8,925 crore constitutes a mere 1.3%. In other words, if these figures are right, 98.7% of all 1,000 rupee notes came back to RBI after demonetisation, and a mere 1.3% were not returned. Attempts to get RBI’s response to queries regarding this on Friday could not elicit any response.
A similar calculation cannot be done for Rs 500 notes because, unlike the Rs 1,000 notes where there were no new ones, the figure for Rs 500 notes in circulation on March 31, 2017 would mostly be for new notes, and the data does not give us a break-up of old and new notes.
However, Surajit Mazumdar, professor of economics at JNU who analysed this data, pointed out to TOI, “If 99% of the Rs 1,000 notes were returned, there is no reason to think that Rs 500 notes would be different in any significant way.
In other words, almost all the old 500 and 1,000-rupee notes appear to have been officially returned. Negligible ‘black money’ has been unearthed.”
Mazumdar added that the total value of demonetised currency on November 8, 2016 was Rs 15.4 lakh crore. Of this, Rs 1,000 notes made up about 44% and Rs 500- notes 56%.
The government and RBI have not divulged the amount of returned notes till now. In June this year, the government said that RBI was still counting the returned money and that it may take a longer time.