There is cash crunch across the country these days. The banks and the ATMs have gone cashless. There is also no cash on hands for majority of the people, particularly the middle classes and employees. Those who keep withdrawing less than Rs 10,000 at a time are finding things going tough with the banks and ATMs staying empty.
The RBI too is finding it tough to make an assessment of the missing cash, though it had made the cash available with all the banks across the country. The cash dispatched by the RBI had reached the respective banks safe as per allocations. The banks too have dispatched the cash to the ATMs. Still there is no cash available.
The situation is same in Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, Madhya Pradesh, Gujarath, Odisha, Kerala, Uttar Pradesh, Jammu and Kashmir and other States. The situation is different in the national capital and the State of Delhi. The ATMs are cashless and remain closed.
Perhaps for the first time that the country is running on the circulation of the lowest denomination notes – Rs 10. The market is now circulating only this note in large numbers while the other denominations like Rs 20, Rs 50, Rs 100 and Rs 500 remain in small numbers in circulation. The big note – Rs 2000 – had gone missing from the market and the peoples’ pocket. Never was the country’s economy like this in the past, at least since Independence.
As on April 6, according to the RBI statement, there is about Rs 18.4 lakh crore currency in circulation in the country. For the first time, the country had seen withdrawal of Rs 45,000 crore through ATMs in the country in just 13 days from April 6. The inflow to the banks during the same period and even later is very slow and was never seen in the past, as per the bankers. People are not visiting the banks to put their money as it is to be. The visits to the banks with withdrawal slips and the visits to the ATMs to swipe the card is more than the deposits. This would be a great hit to the country’s economy, which had survived the two major crises of the world.
The RBI is now planning to print more units of Rs 500 notes in the next one month to meet the crisis. The RBI prints, as per daily order, about 500 crore units of Rs 500 notes per day. With the crisis for cash set to cripple the economy now, the RBI had decided to go for printing of 2500 crore units of Rs 500 notes per day adding additional Rs 75,000 crore cash to the country’s banking network.
The crisis exposes the failure of the administration right from the day one of the demonetization. There is a huge gap between the decision makers in the government and the policy implementation mechanism from the top to bottom. The government had failed to take control of the bureaucracy even after four years. The Congress and Left dominated bureaucracy, including those in the finance sector, is still not giving any place for the BJP government which had resulted in the present crisis.