The currency circulation in the Indian economy has reached an all-time high of two decades.
According to the Reserve Bank of India data, by March 2021, the trend of liquidity in the Indian economy reached 28.6 news. This is 16.8% higher than the previous year. Experts say that due to the uncertainty of the Corona epidemic, people have given priority to cash. This has increased the trend of cash in the economy.
260% jump
According to the report, the cash trend in India’s GDP has increased to 14.6 per cent by March 2021. At the same time, the ratio stood at 12 per cent as of March 2020. That is, it has risen 260 per cent compared to last year, which is the first time. This was not seen even after demonetisation. India’s current GDP size is estimated at Rs 195.9 trillion.
Biggest Bounce After 2010
The increase in liquidity trend has been seen in the last financial year, the biggest jump since 2010-11. At that time, an increase of 18.8 percent was recorded in a year. However, after demonetisation there was also an increase of 37 per cent in 2017-18 but it was an unusual phenomenon.
Cash dependency increased
Due to the second wave of Kovid-19 in the country, the dependence on cash has increased in the last two months. According to RBI data, the cash held by citizens increased by Rs 30,191 crore to a new level of Rs 27,87,941 crore during the fortnight ended 9 April. During the period of 6 weeks from 27 February to 9 April, cash with people increased by Rs 52,928 crore. The reason for this is the fear of the government putting a lockdown on it again.
Why people increased their trust in cash
Financial experts say that during the lockdown last year, people had accumulated more cash. Looking at the concept of Indian society, whenever there was a crisis-like situation, there was a tendency to deposit cash in the houses. This is the reason why there has been an increase in cash demand this year as the second wave of Corona is becoming very deadly.
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