Note in circulation grew 8% annually to `32 lakh cr: FM
New Delhi: As it seems the government's attempts to bring down note circulation (NiC) have fallen flat as NiC has witnessed an annual growth of 7.98 per cent to Rs 31.92 lakh crore as of December 2, 2022. According to Union Finance Minister Nirmala Sitharaman, the value of note in circulation was Rs 29.56 lakh crore on December 3, 2021 that increased to Rs 31.92 lakh crore as of December 2, 2022.
Replying to a question from Dravida Munnetra Kazhagam (DMK) MP Velusamy P, the Finance Minister told Lok Sabha that the demand for currency depends upon several macroeconomic factors, including economic growth and level of interest rates.
The quantum of cash or banknotes in the economy depends on the requirement for meeting the demand for banknotes due to GDP growth, inflation, replacement of soiled banknotes and growth in non-cash modes of payment.
She further stressed that the mission of the government is to move towards a less cash economy to reduce the generation and circulation of black money and to promote the digital economy.
Both the government and RBI have taken measures to promote a less cash economy and encourage digital payment, she said, adding that the RBI has advised banks to ensure that merchants on-boarded by them do not pass on MDR charges to customers while accepting payments through debit cards.
The Department of Revenue advised banks to immediately refund charges collected, if any, on or after January 1, 2020, on transactions carried out using the electronic modes prescribed under section 269SU of the Act and not to impose charges on any future transactions through the prescribed modes, the minister noted.
The Ministry of Electronics and Information Technology, Government of India had launched a BHIM (Bharat Interface for Money) cash back scheme for merchants to promote usage of BHIM-UPI amongst merchants by incentivising its adoption and also to encourage transactions via BHIM-UPI mode, and the scheme was active from June 5, 2017 and closed on June 30, 2018, the minister said a
written reply.
