A 9.8 per cent nominal GDP growth would have taken the currency available with the public to Rs 19.4 trillion by March 2018, as against the actual availability of Rs 17.5 trillion, it said, stressing that the gap of Rs 1.9 trillion is not the shortfall. The proportion of digital transactions stands at a low Rs 1.2 trillion only, much down the immediate months following the November 2016 note-ban.
An unexpected spurt in currency demand in various parts of India which include Madhya Pradesh, Uttar Pradesh and poll-bound Karnataka have led to dry ATMs in several parts of the country leaving people enraged. The situation has sent the government scrambling to make contingency plans to cover the deficit. The government said it suspects that Rs 2,000 notes were being hoarded and plans to increase 5-fold the printing of Rs 500 notes.
The cash crunch has drawn severe criticism from the opposition which has targetted PM Narendra Modi-led government and has termed the whole situation as the return of 'Demonetisation'. Various leaders from Congress, including party president Rahul Gandhi and senior leader P Chidambaram have attacked the ruling party and slammed the Centre for the situation.
1) The PMO on Tuesday took stock of the ATM cash shortage and held a meeting with Economic Affairs Secretary Subhash Chandra Garg and Financial Services Secretary Rajiv Kumar over the matter.
2) Rajiv Kumar said that the ATM cash shortage in various parts of the country would be normalised in five to seven days.
5) Rahul Gandhi took to Twitter and attacked PM Modi alleging that he 'snatched' the Rs 500 and Rs 1000 currency notes from people's pocket and 'gave' it to Nirac Modi. "Modi ji has destroyed the banking system of the country," he said.
He alleged that Narendra Modi did not speak a word "after Nirav Modi fled the country with Rs 1,000 crore." "The prime minister has not uttered a single word after he made the entire country stand in a queue, snatched Rs 500 and Rs 1000 currency notes from your pocket and put it in Nirav Modi's pocket. He fears standing in Parliament too," he said.
8) The states affected by this cash crunch situation are Andhra Pradesh, Uttar Pradesh, Bihar, Karnataka among others.
9) The earlier reports of the cash crunch came from Telangana and Andhra Pradesh back in January earlier this year.
10) Peculiar rumours have led to the cash crunch in Andhra Pradesh and Telangana with people opting for heavy withdrawals. According to The Indian Express, there have been rumours that the passage of Financial Resolution and Deposit Insurance (FRDI) Bill will lead to heavy monetary losses if a bank goes bankrupt. These rumours are believed to have sparked heavy withdrawals, reports claimed.