Indians returned nearly the entire amount of currency withdrawn in the government's note ban of November 2016, raising fresh questions over the goal of a shock move that triggered a sharp slowdown in the economy. The RBI said the humungous task of currency management, including remonetisation, processing and reconciliation, was achieved in record time.
The Congress had earlier demanded an apology from Prime Minister Narendra Modi for allegedly lying to the country, after the RBI said 99.3 per cent of the junked Rs 500 and Rs 1,000 notes have returned to the banking system.
The old notes of 500-rupee and 1,000-rupee denomination ceased to be legal tender from December 31, 2016.
The new Rs 2,000 note - which was initially believed to have come printed with better security measures - was also not immune to counterfeit. "I suspect that the bulk of the currency (Rs 10,720 crore) was in Nepal and Bhutan and some of that was lost or destroyed".
Now, even if 100% of demonetised currency returned to the system, it does not mean all of this cash was "white" or money that was generated through wholly legal means. Instead, a new Rs 2,000 notes were introduced post note ban. "My first question now is - where has the black money gone?" she remarked.
On account of demonetisation, 2016-17 was an exceptional year and the after-effects continued in 2017-18 as well, said the RBI report, adding that the overall indent for 2017-18 was higher by 9.1 per cent as compared to last year.
While The Wire has over the last eighteen months reported and analysed how India's currency-in-circulation (CiC) and currency-to-GDP ratio has not changed drastically after demonetisation, the RBI's annual report provides further proof of how little things have changed.
Demonetisation led to long queues outside banks.
The central bank's annual report says only a fraction of the currency was left out of the system after the unprecedented notes ban aimed at checking black money and corruption - an exercise that cost the government Rs 8,000 crore.
Thousands of SME units were shut down, lakhs of jobs were destroyed and the Indian economy lost 1.5% of GDP in terms of growth, Chidambaram said in another tweet.
Quoting RBI report, the Trinamool Congress supremo said 99.3 per cent of the demonetised money has come back to the banking system.
In a series of tweets, the former finance minister also said RBI figure has suggested that the government had actually demonetised only Rs 13,000 crore and the "country paid a huge price" for it. However, this is more than double the amount of Rs. 3,421 crore that was spent in the previous year (July 2016 to June 2017).