Already 20 plus days over after Prime Minister Narendra Modi asked the nation to bare the pain of cash crisis for 50 days, due to demonetization. Senior ministers in the government attempts to assure the people that `normalcy’ would be restored by end of this month. However, ground realities seems to be different.
Already about Rs 11 lakh crore out-lawed cash notes (Rs 500 and Rs 1000) returned to the baking system. Another over Rs 5 lakh crore to be expected still remained in circulation.
According to RBI sources till now about Rs 5 lakh crore worth new notes were printed. After printing over Rs 4 lakh crore worth 200 crore pieces of Rs 2,000 notes, now RBI focusing towards printing of Rs 500 and Rs 100 notes. Already Rs 1 lakh crore worth notes in other denominations, mainly Rs 500 and Rs 100 were printed.
The printing capacity of the four note printing presses, two run by the government and two by the RBI, is around 300 crore pieces a month on three-shift working. That amounts if all of them pump out Rs 500 notes, they can print Rs 1.5 lakh crore a month. It will thus take a little over three months to remove the backlog. This means the cash crisis will abate only by end-February.
It is interesting to note that the cash withdrawn in banks is less than one third of the amounts deposited. This scenario makes us to believe that present cash crisis is bound to continue till January-end.
