Till March 2017, Rs 2,000 notes made up half of the total notes in circulation, while Rs 500 notes were sharply down compared to the year-ago period, explaining the difficulties faced by people in carrying on their day-to-day activities. But, the Reserve Bank of India (RBI) did ramp up the supply of Rs 100 notes, partly because it released old bank notes into the market.
RBI’s annual report showed that as of March, Rs 2,000 notes made of Rs 6.57 lakh crore of the total notes in circulation, which was 50.2 per cent of Rs 13.1 lakh crore of notes issued so far. The total value of Rs 500 notes at the end of March was Rs 2.94 lakh crore, or 22.5 per cent of the total notes. In the year-ago period, the share of Rs 500 notes was 47.8 per cent of Rs 16.42 lakh crore, which made up Rs 7.85 lakh crore.
According to the central bank’s data, Rs 100 notes in March made up Rs 2.5 lakh crore, or 19.3 per cent of the total notes in circulation. A year ago, Rs 100 notes were worth Rs 1.6 lakh crore, or 9.6 per cent of the total notes in circulation.
“The fact that the total currency in circulation at Rs 15.7 lakh crore (as of August 18, 2017) is still short of the Rs 17.3 lakh crore total supply of currency that existed before demonetisation was announced… shows that despite the expediency shown by the central bank, the remonetisation process is incomplete even after 10 months of the demonetisation shock,” wrote Dhananjay Sinha, chief economist at Emkay Global, in a note.
According to Sinha, RBI’s printing presses might have operated at slightly lower than their peak capacity, especially after June and that explained why the remonetisation process was still not complete.