Currency shortage: Government to increase production of currency notes by 5 times
- Author: Rita Burton Apr 17, 2018,
Apr 17, 2018, 15:25
For instance, in states like Andhra Pradesh and Telangana, as The Wire has reported, there is widespread fear among people that they will lose their hard-earned cash if their bank goes bankrupt. Finance Minister Arun Jaitley called the crunch "temporary shortage" and said that the situation is being tackled quickly.
Jaitley said, "Have reviewed the currency situation in the country".
The sudden phenomenon has been rather weird because the cash in circulation today is more than what it was on November 4, 2016 - four days before Prime Minister Narendra Modi announced demonetisation of Rs 500 and Rs 1,000 notes, accounting for over 85 per cent of the total currency in circulation at that time.
"The temporary shortage cause by "sudden and unusual increase" in some areas is being tackled quickly", he said, without explaining the cause behind the sudden shortage of cash.
Certain parts of Andhra Pradesh, Telangana, Madhya Pradesh, Bihar and poll-bound Karnataka have reported shortage of currency and ATMs running dry. Some states have less currency and the others have more. The government has formed a state-wise committee and RBI also formed a committee to transfer currency from one state to other. "It will be done in three days". "We need to pay for the admission of children to school and purchase groceries", a resident of the northern city of Varanasi told the ANI news agency. People have also tweeted the photos of long queues outside some working ATMs. Karnataka facing elections next month has been partly spared from the cash crunch.More news: Taliban seize district in Afghanistan's Ghazni province
How much cash is in the economy? The situation has been the same for 15 days. After the demonitisation exercise, the currency in circulation increased to Rs. 16,50,000 crore. "There has been some tendency of some people using Rs 2,000 notes, but that does not affect the overall supply of the Rs 2,000 notes".
Social media users on Tuesday reacted sharply to reports that ATMs are running out of cash in several states, comparing the problem to demonetisation in 2016 and criticising the government.
Asked whether there was any hoarding of the Rs 2,000 notes, he said: "In this system, there are about 6.70 lakh crore worth of Rs 2,000 notes". It should be noted that several people who were using Paytm have now returned to cash after the KYC diktat.
Commenting on the situation, J N Singh, chief secretary, said, "We understand the urgency faced by the banks and are in constant touch with the RBI as well as the central government to resolve the issue". No doubt Twitterati are creative and amusing both at a time and knows well to take a dig over the issues in a unique style.