top of page

With Digital India running with decent pace but still the Cash With Public is increasing.

High cash intensity has been increasing in the Indian economy since 2000 and has grown very rapidly in the last 2 to 3 years. It is not working at all like the policies of Reserve Bank of India.

In the 1980s, the ratio of currency to public and GDP was 8.2%, which increased to 10.6% in 2010. In the financial year 2021, it increased to 14.5%, but surprisingly, there was a fall in GDP during this period and digital payments were also happening on a large scale. And in the month of February the ratio of currency to public and GDP was 13%.

The share of currency in household financial assets increased from 8.8% in 1990 to 9.8% in 2000 and further increased to 12.4% in 2010. Notes were deposited in the bank due to demonetisation, but after that there was a huge increase in currency with public. Kovid, GST and demonetisation are included behind the increase in this.

Negative trade credit has increased cash sales and reduced currency and trade credit and increased cash holdings by firms. Firms that hold cash can be traced to the uncertainty of cash and trade credit flows, which has rendered the trade credit network dysfunctional and has a negative impact on banking.

Apart from this, no bill or invoice is generated for those illegal things which are coming from China because they are illegal and it is increasing continuously since the year 2000. This import is taking place on such a large scale that it is continuously increasing the demand for currency and it is hampering digital payments.

This illegal import is increasing in the same way that our formal imports from China are increasing, between January and November in 2021 our imports from China increased by 49%, whether we have reduced our consumption, or our Relations are not cordial with China. Due to these reasons, the currency with public is increasing this financial year also.

To stop all this, first of all, we have to stop illegal imports from China and repair the network of trade credit which is being destroyed.


Post: Blog2_Post
bottom of page