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The <keyword id="19899810" type="General" weightage="20" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (<keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword>) on Monday said 97.96 % of the <keyword id="6429211" type="General" weightage="20" keywordseo="rs-2" source="Orion">Rs 2</keyword>,000 denomination <keyword id="20481528" type="General" weightage="20" keywordseo="banknotes" source="keywords">banknotes</keyword> have returned to the banking system, and only Rs 7,261 crore worth of the withdrawn notes are still with the public. On May 19, 2023, the RBI announced the withdrawal of Rs 2,000 denomination banknotes from circulation. The total value of Rs 2,000 banknotes in circulation, which was Rs 3.56 lakh crore at the close of business on May 19, 2023, when the withdrawal of Rs 2,000 banknotes was announced, has declined to Rs 7,261 crore at the close of business on August 30, 2024, the RBI said. "Thus, 97.96 % of the Rs 2,000 banknotes in circulation as on May 19, 2023, has since been returned," it said in a statement. The facility for deposit and/or exchange of the Rs 2,000 banknotes was available at all bank branches in the country till October 7, 2023. The facility for the exchange of the Rs 2,000 banknotes has been available at the 19 issue offices of the <keyword id="19922074" type="General" weightage="20" keywordseo="reserve-bank" source="keywords">Reserve Bank</keyword> since May 19, 2023. From October 9, 2023, RBI issue offices are also accepting Rs 2000 banknotes from individuals and entities for deposit into their bank accounts. Further, members of the public are sending Rs 2,000 banknotes through India Post from any post office within the country to any of the RBI issue offices for credit to their bank accounts. The 19 RBI offices depositing/exchanging the banknotes are in Ahmedabad, Bengaluru, Belapur, Bhopal, Bhubaneswar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, New Delhi, Patna and Thiruvananthapuram. Rs 2000 banknotes were introduced in November 2016, following the demonetisation of the then-prevailing Rs 1,000 and Rs 500 banknotes. However, even after their discontinuation, Rs 2,000 notes continue to remain legal tender. Per the apex bank's last update, which came out on August 1st, 2024, Rs 2,000 banknotes had declined to Rs 7409 crore at the close of business on July 31, 2024. Thus, by last month, 97.92% of the Rs 2,000 banknotes which were in circulation as on May 19, 2023, had been returned.

Rs 2,000 notes: 97.96% returned; Rs 7,261 crore worth notes still with public

<ul><li>The last <keyword id="30067" type="General" weightage="40" keywordseo="rbi" source="Orion">RBI</keyword> update says that 93% of the ₹2,000 notes are back with the central bank.</li><li>The ₹2,000 notes were first introduced during the <keyword id="3315394" type="General" weightage="50" keywordseo="demonetisation" source="Orion">demonetisation</keyword> exercise.</li><li>The deadline to deposit the notes is on September 30, 2023.</li></ul> With a couple of weeks to go before the deadline to deposit ₹2,000 banknotes, e-commerce giant Amazon has said that it has discontinued accepting them. Till now, many retailers along with e-commerce players, petrol pumps and even jewellers had generously started accepting these notes after RBI withdrew them in May, without banning them. However, with the festive season upon us, fewer and fewer retailers will be accepting the mega note at shops and stores and most people with residual notes will have to hit banking channels to deposit them. As of now, 93% of these notes accounting to ₹3.32 lakh crore are back with banks, said the latest RBI update on it, released in early September. “Consequently, the value of ₹2,000 banknotes in circulation as at the close of business on August 31, 2023 stood at ₹24,000 crore,” read RBI’s statement. Most of these notes had ended up with banks, which made the banking regulator come up with a temporary measure to mop up excess liquidity from the banks in its August 10 credit policy meeting update. The RBI said that scheduled banks shall maintain an incremental cash reserve ratio (I-CRR) of 10%. The new measure had come into effect the fortnight starting August 12, and the RBI has already decided to <a href="https://www.newindianexpress.com/business/2023/sep/09/rbi-to-withdraw-incremental-crr-in-phases-by-october-7-2613205.html">withdraw ICRR in a phased manner</a>. The RBI first introduced the 2000 rupee note as part of the demonetisation exercise on November 8, 2016. Currently, this is the highest currency note in circulation. The note was introduced as the ₹500 and ₹1,000 notes were withdrawn from the system to boost currency circulation. Now, with the circulation problem a thing of the past, the note has been withdrawn. Some history of updates 2017: The Indian central bank added a new security feature -- a fluorescent strip that glows green under ultraviolet light. 2018: RBI changed the design of the note with a portrait of Mahatma Gandhi on the front and a map of India on the back. 2019: Another security feature was added: a tactile strip that can be felt by people with visual impairments.

As the deposit deadline approaches, ₹2,000 notes fade from the system

The decision of the Reserve Bank of India (RBI) to withdraw Rs 2,000 denomination banknotes from circulation will not have any major impact on <keyword id="47316" type="General" weightage="20" keywordseo="gold-demand" source="Orion">gold demand</keyword> and also on the <keyword id="109488" type="General" weightage="20" keywordseo="rupee-value" source="Orion">rupee value</keyword>, an expert said on Saturday. According to the expert, the number of Rs 2,000 denomination notes in circulation (or stocked in lockers) is not huge. "The number of Rs 2,000 currency notes in circulation is not large. This is not like <keyword id="3315394" type="General" weightage="20" keywordseo="demonetisation" source="Orion">demonetisation</keyword> of Rs 500 and Rs 1,000 currency notes that happened in 2016," Hareesh V., Head of Commodities Research, Geojit Financial Services told IANS. According to Hareesh, there are other investment avenues and further, there is a limit for using hard cash to purchase gold. "The RBI decision will also not have any bearing on the gold/silver futures," he said. The RBI on Friday said Rs 2,000 denomination notes to the value of Rs 3.62 lakh crore were in circulation on March 31, 2023. Hareesh said even if people decide to convert their Rs 2,000 into US dollars, there will not be any major impact on the value of the Indian rupee. "As witnessed during demonetisation, we expect the deposit accretion of banks could improve marginally in the near term. This will ease the pressure on deposit rate hikes and could also result in moderation in short-term interest rates," Karthik Srinivasan, Senior Vice President Financial Sector Ratings, ICRA said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/international/news/check-out-worlds-most-expensive-ice-cream-costs-and-why/slidelist/100375438.cms">Price of ice: World’s most expensive ice cream created by Japanese brand</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/zomato-net-loss-narrows-to-188-crore-in-q4-revenue-rises-70-yoy/articleshow/100358894.cms">Zomato net loss narrows to ₹188 crore in Q4, revenue rises 70% YoY</a>

Rs 2,000 note withdrawal may not impact gold demand, rupee value: Expert

The counting of votes cast by 64.2 crore hopeful Indian voters during the six-week-long 18th <keyword id="19923279" type="General" weightage="20" keywordseo="Lok-Sabha-elections" source="keywords">Lok Sabha elections</keyword> officially began at 8 AM today and it is suffice to say that the air is crackling with equal parts excitement and trepidation. Over 700 aspiring parties participated in the world’s largest democratic exercise. But the main duelling parties remain consistent with previous trends: the ruling Bharatiya Janata Party (<keyword id="19894848" type="General" weightage="20" keywordseo="BJP" source="keywords">BJP</keyword>) led by Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="Narendra-Modi" source="keywords">Narendra Modi</keyword> and the opposition bloc led by the <keyword id="19964138" type="General" weightage="20" keywordseo="Indian-National-Congress" source="keywords" meta.keywordsubtype="org" meta.entityname="Indian National Congress" meta.hostid="261" meta.entityid="Indian National Congress">Indian National Congress</keyword> (INC). Modi is shooting for a third, historic win after spending the last ten years in office, but the road ahead does not seem as smooth as anticipated. A political party in India requires at least 272 seats to cross the majority mark in the 543-member lower house of the Indian parliament, the Lok Sabha. The PM has audaciously declared that he is expecting a huge win exceeding 400 seats, the slogan ab ki baar 400 paar is stuck in every Indian’s head — irrespective of their political inclination. The Congress-led India bloc, on the other hand, is aiming for a relatively modest 295. On Saturday, most exit poll surveys predicted 350-370 seats for the BJP and between 107-140 seats for the opposition. However, the early trends are showing a very different picture with the INDIA bloc exceeding expectations in many states. Polls have been off the mark a few times before, but as NDA looks poised to win a third term, albeit with a few last-minute struggles, here’s a look back at the previous elections responsible for Mr Narendra Modi’s unmatchable dominance over <keyword id="20184421" type="General" weightage="20" keywordseo="Indian-politics" source="keywords">Indian politics</keyword>. <cmsannotation type="cmsannotation" annotationid="Inside BJP’s decade-long winning streak" comment="subhead" text="Inside BJP’s decade-long winning streak">Inside BJP’s decade-long winning streak </cmsannotation>The BJP has come a long way since 1984 when the party won just two seats. Its pro-Hindutva stance pushed it to prominence over the decades, especially in the 1990s. The BJP was in power for a considerable amount of time under Atal Bihari Vajpayee’s leadership at the turn of the century. But the kind of support that Narendra Modi has received since 2014 has been unmatched in the history of modern Indian politics. In 2014, the BJP saw a surprising landslide victory with 282 of the 543 seats. But what factors contributed to its sweeping win with a 31.3% majority? Throughout its campaigning ahead of the general elections that year, the BJP kept stressing its interest in fixing the economy and combating corruption allegedly caused by the Congress party’s rather inept governing. Modi, who called himself a chowkidar or watchman, vowed to set the government and bureaucracy to rights. He promised more jobs for young Indians and even launched a social media campaign to appeal to the younger generation. Many experts suggested that Modi created the brand “NaMo'' for himself through relentless media campaigning, something that <keyword id="19895780" type="General" weightage="20" keywordseo="rahul-gandhi" source="keywords">Rahul Gandhi</keyword> and other major political leaders could not do at the time. Additionally, he is also said to have had the support of the 45,000 country-wide RSS branches — the Hindu cultural nationalist parent of the BJP. However, after the leader had managed to comfortably settle into his new role as the Prime Minister of India, he announced the demonetisation of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series on 8 November 2016. As per a 2018 report from the Reserve Bank of India said that “the effort had failed to remove black money from the economy”. Modi was widely criticised for the way this move impacted the middle-class people of India. Despite this setback as well as criticism against his economic reforms like GST, he continued to implement bold policy changes to strengthen the core economy. His tilt towards a digital economy and seemingly tough actions against corrupt practices received widespread acclaim. He also successfully invoked a strong sense of nationalism and security in the people through the Balakot airstrike, a bombing raid conducted by Indian warplanes in February 2019. And it worked! BJP came to power again in the 2019 Lok Sabha elections, this victory being bigger than the last. The BJP won a whopping 37.36% of the vote — the highest by a political party since the 1989 general elections with 303 seats. However, similar to 2019, towards the end of his second term in 2024, joblessness appears to be on the rise and incomes of farmers continue to plummet. Amid major issues like food inflation and the threat of AI to the job market, the ruling party relied on not-so-subtle religious polarisation and a ton of welfare programmes. From being chowkidar in 2014, Prime Minister Narendra Modi has been depicted to be a saint today by many of his followers. While past leaders in India have tried to hold on to their secular image, Mr Modi has been seen flouting this convention on multiple occasions, expressing that he takes pride in his religion. With crores of followers still supporting him, the PM seems to be already on a path to victory. Only time will tell if the struggles during the last phases of this year’s election will come back to haunt him. In the meantime, stay tuned to Business Insider India for <a href="https://www.businessinsider.in/politics/elections/lok-sabha-election-results-2024-live-counting-begins-at-8-am-as-bjp-led-nda-hopes-for-a-historic-third-term/articleshow/110685785.cms">more updates on the Lok Sabha elections 2024</a>.

As PM Modi awaits his third big win, here’s how BJP created history during the 2014 & 2019 Lok Sabha elections

<ul><li><keyword id="14509" type="PERSON" weightage="20" keywordseo="Rajinikanth">Rajinikanth</keyword> told reporters yesterday that the Modi administration implemented its demonetisation initiative in November 2016 in a “flawed” manner. </li><li>This marks a reversal of his stance a few years ago, when he lauded the Modi government on the reform right after it was announced. </li><li>At the end of 2017, Rajinikanth said that he was starting a political party to contest elections for the State Assembly in <keyword id="20154" type="LOCATION" weightage="20" keywordseo="tamil-nadu">Tamil Nadu</keyword>. </li><li>While not much progress seems to be made on this front over the course of 2018, a big announcement is expected for the end of the year. </li></ul>To his legion of swarming fans, Tamil film superstar Rajinikanth is something of a god. But to India’s central government, the 67-year old actor and aspiring political leader might be more of a bugbear. At a press conference in Chennai yesterday, Rajinikanth remarked that the Modi administration implemented its demonetisation initiative in November 2016 in a <a href="https://www.business-standard.com/article/pti-stories/rajini-accuses-centre-of-flawed-implementation-of-note-ban-118111201660_1.html">“flawed”</a> manner, according to the Press Trust of India. He added that the initiative should have been implemented only after “detailed research” on its implications had been carried out. This marks a reversal of <a href="https://twitter.com/rajinikanth/status/796040786965991424?lang=en">his stance</a> a few years ago, when he lauded the Modi government on the reform right after it was announced. In addition, when asked about the possibility of a mega-alliance of opposition parties against the ruling BJP in next year’s general elections, the actor remarked that if regional parties believed that the party was “dangerous”, then it probably was. A number of South Indian politicians have criticised the demonetisation reform. Last week, M K Stalin, the head of Tamil Nadu’s DMK party, called the <keyword id="6355611" type="UNKNOWN" weightage="20" keywordseo="note-ban">note ban</keyword> a <a href="https://twitter.com/mkstalin/status/1060412326707322880?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1060412326707322880&amp;ref_url=https%3A%2F%2Fwww.ndtv.com%2Ftamil-nadu-news%2Fmk-stalin-notes-ban-demonetisation-demonetization-is-one-man-made-disaster-for-india-1944590">“man-made disaster for India”</a>. Rajinikanth’s disapproval of the ruling party of <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword> and Amit Shah could be a calculated ploy to gain more supporters as he prepares the launch of his own political party. With their history of leftist politics, the southern states of India are widely seen to be an Achilles heel for the right-wing BJP. In the 2014 general elections, the saffron party won only <a href="https://timesofindia.indiatimes.com/india/bjp-looking-at-alliance-route-to-boost-its-prospects-in-south-india/articleshow/65661570.cms">a handful </a>of seats from the states of Telangana and Andhra Pradesh with zero from Kerala. At the end of 2017, Rajinikanth announced that he was <a href="https://www.thehindu.com/news/national/tamil-nadu/live-updates-actor-rajinikanths-political-announcement/article22337334.ece">starting a political party </a>to contest elections for the State Assembly in Tamil Nadu. While not much progress seems to be made on this front over the course of 2018, one of his compatriots, AC Shanmugam, the head of small political outfit the New Justice Party, <a href="https://economictimes.indiatimes.com/news/politics-and-nation/rajinikanths-political-party-likely-by-year-end/articleshow/65939643.cms">told Economic Times</a> in September that an announcement in this regard was slated for the end of the year. In October, media outlets speculated that the party would be launched on <a href="https://www.thehindu.com/news/national/tamil-nadu/rajinikanth-may-launch-party-on-december-12/article25242761.ece">12 December</a>, the actor’s birthday.

One of India’s biggest film stars, Rajinikanth, has reversed his stance on demonetisation as he prepares to launch his own political party

<ul><li><keyword id="3658" type="COUNTRY" weightage="20" keywordseo="India">India</keyword>’s <keyword id="6358156" type="ORGANIZATION" weightage="20" keywordseo="central-bank">central bank</keyword>, the Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>), released its <keyword id="3608734" type="UNKNOWN" weightage="20" keywordseo="Annual-report">annual report</keyword> for 2017-18 on Thursday. </li><li>Both negative and positive, the report says that <keyword id="6356076" type="DEFINITION" weightage="20" keywordseo="indian-economy">Indian economy</keyword> will have to precariously balance itself to brace for the coming year. </li><li>The report also highlights how, despite the Indian government's objectives, the goals laid by the Prime Minister are far from their intended targets.</li></ul>India’s central banking institution, the Reserve Bank of India (RBI), just released its <a href="https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/0ANREPORT201718077745EC9A874DB38C991F580ED14242.PDF">annual report</a> for the year 2017-2018, bringing some key issues of the Indian economy into the limelight. On the one hand, the report states that the Indian economy is set to unlock its growth potential through the intensification of structural reforms but on the other, the threat of inflation and non-performing assets (NPAs) still looms overhead. And, though the RBI predicts strong growth for India’s secondary and primary sectors, it also speculates that the country will face challenges in the banking industry and from volatility in international markets. The good with the bad, these are some of the key observations put forward by the RBI in their report. The curious case of India’s current account deficit Domestic consumption hasn’t lost its step with India maintaining its stature as the preferred destination for foreign direct investments (FDIs). As per the report, it’s the manufacturing sector supported by its counterparts that have made this possible. Domestic consumption, in turn, is a result of an increase in capital expenditure as well the push towards exports. Foreign capital is largely flowing into communication and computer services, retail and wholesale trade, as well as financial services. Mauritius and Singapore take the lead in FDIs with combined equity investments of around 61%. Turmoil in international waters The sanctions placed by the United States on Iran won’t only impact India’s imports but the overall international supply of oil. That in turn, won’t play out well for India’s trade deficit primarily because of India’s increasing energy demands. A potential increase in India’s current account deficit opens the doors for inflation risks to throw shade on the Indian economy. The RBI has stressed on the importance of heading off these pressures before they generalise into adverse trends. The counting of demonetised notes is complete Last year’s report told us that 99% of the banned currency notes had found their way back to the banks, and this year that’s up by 0.3%, which isn’t really all that significant. While the RBI’s efforts to process and verify specified bank notes should be commended, one has to ask whether the effort was all for nought. Prime Minister <keyword id="6354477" type="PERSON" weightage="20" keywordseo="Narendra-Modi">Narendra Modi</keyword>’s initiative to catch black money only seems to have led to an extreme cash shortage that steamrolled into sluggish economic growth, a loss for businesses and over a million people losing their jobs. The informal economy, in particular, is still suffering from its after-effects. To fake or not to fake The new currency notes despite the numerous so-called ‘úpgrades’ are still vulnerable to being counterfeit, just like the old currency notes. And, it’s not just the bigger denominations of ₹500 and ₹2,000, but also the ₹50 note. The only difference is that the overall number of <keyword id="6364565" type="UNKNOWN" weightage="20" keywordseo="fake-notes">fake notes</keyword> that are in circulation has taken a dip. Return of the cash economy While demonetisation and the resulting short supply of cash did lead to an increase in digital cash payments, the return of liquidity in the economy shows people coming back to the comfort of cash. In fact, if RBI’s estimates are to be taken at face value, the liquid currency kept at home has increased to 2.8% of the total gross national disposable income (GNDI), which is the highest it’s been in seven years. Even savings are at a seven-year high of 11.1%. That being said, it’s not that the Indian population has reverted from digital payments altogether. Non-cash transactions are still increasing, just a rate slower than last year’s and that is indicative of the fact that despite all the new online payment platforms, cash is still the preferred method of exchange. Banking drama With the number of bank frauds that have come into the limelight this past year, it’s hardly surprising that the RBI speculates that bad loans is going to increase even further in the coming year. According to the report, the ‘prevailing economic situation’ is a combination of mark-to-market treasury losses and the increase of provisioning against non-performing assets (NPAs). Which basically means that the banks didn’t make much of a profit on their investments in the stock market and have had to set aside an increasing amount of money to hedge against bad loans. That being said, the overall flow of financial resources from the banking sector to the commercial sector has shown an increase, with the former accounting for 43% of all fund flows to the latter. That means that there's scope for credit absorption. But that will only be efficiently done if the problem of NPAs is appropriately addressed and banks are sufficiently re-capitalised after facing large losses.

RBI’s annual report paints a cloudy picture of what’s next for the Indian economy

<ul><li>RBI announced the withdrawal of ₹2,000 currency notes from circulation on Friday.</li><li>People possessing these notes can deposit them in their bank accounts or exchange them from May 23 to September 30.</li><li>The RBI has also advised banks to stop issuing ₹2,000 denomination banknotes with immediate effect. </li></ul>The Reserve Bank of India (RBI) on Friday announced the withdrawal of ₹2,000 currency notes from circulation, but said that they will continue to be legal tender. People possessing these notes can deposit them in their bank accounts or get them exchanged from May 23 to September 30, the central bank said in a statement. “In order to ensure operational convenience and to avoid disruption of regular activities of bank branches, exchange of ₹2000 banknotes into banknotes of other denominations can be made upto a limit of ₹20,000/- at a time at any bank starting from May 23, 2023,” the statement said. The RBI has also advised banks to stop issuing ₹2,000 denomination banknotes with immediate effect. About 89% of the ₹2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak as on March 31, 2018 (37.3% of notes in circulation) to ₹3.62 lakh crore constituting only 10.8% of notes in circulation as on March 31, 2023. “It has also been observed that this denomination is not commonly used for transactions. Further, the stock of banknotes in other denominations continues to be adequate to meet the currency requirement of the public. In view of the above, and in pursuance of the ‘Clean Note Policy’ of the RBI, it has been decided to withdraw the ₹2,000 denomination banknotes from circulation,” RBI said. The facility for exchange of ₹2,000 banknotes upto the limit of ₹20,000/- at a time shall also be provided at the 19 Regional Offices (ROs) of RBI having Issue Departments from May 23, 2023. "As witnessed during demonetisation, we expect the deposit accretion of banks could improve marginally in near term. This will ease the pressure on deposit rates hikes and could also result in moderation in short-term interest rates," said Karthik Srinivasan, senior VP, group head - financial sector ratings, ICRA. It may be noted that RBI had undertaken a similar withdrawal of notes from circulation in 2013-2014. The ₹2,000 notes were introduced in 2017, after the government of India went in for <keyword id="6362150" type="General" weightage="20" keywordseo="demonetization" source="Orion">demonetization</keyword> of ₹500 and ₹1,000 notes in November 2016. Prime Minister Narendra Modi announced this decision in a surprise speech that shocked the nation. He said that the move would curtail the shadow economy and encourage cashless transactions.

RBI to withdraw ₹2,000 currency notes from circulation, will continue to be legal tender

<ul><li>On July 19th, the Reserve Bank of India said it would issue a new 100-rupee note. </li><li>Five new <keyword id="6724555" type="UNKNOWN" weightage="20" keywordseo="banknotes">banknotes</keyword> have been introduced since demonetisation- 10 rupees, 50 rupees, 200 rupees, 500 rupees and 2000 rupees. </li><li>However, the new 100-rupee note will be relatively more expensive to introduce because its size is different from the original note. Hence, banks will need to modify their ATMs. </li></ul> Change is said to be the only constant, and in the aftermath of <keyword id="3315394" type="PERSON" weightage="20" keywordseo="demonetisation">demonetisation</keyword> the phrase rings true in more ways than one. Five new banknotes have been introduced since November 8th, 2016 - 10 rupees, 50 rupees, 200 rupees (which didn’t have an earlier version), 500 rupees and 2000 rupees - an unprecedented amount. And on July 19th, the Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) announced the introduction of a new lavender-coloured 100-rupee note. Introducing a new note to the economy doesn’t come cheap. The RBI’s printing expenses more than doubled to <a href="https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/9XIRESERVE47414B77E45D404DA06971A2FB722A71.PDF">₹79.65 billion</a> in 2016-17, from ₹34.21 billion in 2015-16, owing to the cost of remonetisation. A <a href="https://www.hindustantimes.com/business-news/what-does-it-cost-to-print-the-new-rs-500-rs-2000-and-other-currency-notes/story-d7wlemIT1sbtibLjPzwhEM.html">filing</a> under the Right to Information Act in December 2016 revealed that it cost the government ₹3.54 for printing each new 2000-rupee note and ₹3.09 for printing each new 500-rupee note. In comparison, the older 500-rupee and 1000-rupee notes, which the 2000-rupee note was meant to replace, cost ₹2.50 and ₹3.17 apiece to print. The printing of 2000-rupee notes was suspended last year given the note’s unpopularity. The government made a push towards promoting lower value notes instead, starting with the introduction of the 200-rupee note. An additional cost for the 100-rupee note Barring printing expenses, there are a number of other costs to introducing new notes. ATMs need to be restocked, new notes need to be transferred to the government’s issue offices and <keyword id="6378917" type="UNKNOWN" weightage="20" keywordseo="currency">currency</keyword> chests and banks need to update their note processing systems. However, the introduction of the new 100-rupee note is expected to be more expensive than other notes, relative to their original versions, owing to its size. The dimensions of the note (66mm x 142mm) are different from the original 100-rupee note as well as the 200-rupee note. This will lead to an additional cost - the cost of recalibrating ATMs to adjust to the note’s specifications. This is expected to cost a cumulative total of ₹1 billion alone. However, this expense will not be borne by the government, but by the country’s banks and ATM operators. The banks already had to modify their ATMs in January 2018 when the 200-rupee note was released.This happened despite their insistence on waiting till the new 100-rupee note was introduced. Now, six months later, they will have to adjust their ATM spacing systems again. The recalibration process involves the installation of spacing systems to separate the notes. These systems are programmed in accordance with the size of each note. A note with completely new dimensions requires an adjustment to these spacers. The new 100-rupee note won’t be the last note to be introduced by the current government. The RBI is reported to be in the process of developing a new 1000-rupee note. Once it is introduced and the short-term adjustment to the new note concludes, Indian banks and ATM operators will finally be able to rest easy for a while.

India's new ₹100 note will be relatively more expensive to introduce than the others

The gross domestic product (GDP) figures for the three-month period of October to December 2018, came in today (Feb 28, 2019). The Indian GDP grew by 6.6%, the slowest in five quarters. In fact, even a growth of 6.6% seems to be on the optimistic side, given that this is not in line with the underlying economic fundamentals, which can be measured through high-frequency economic indicators like car sales, two-wheeler sales, tourist arrivals, railway freight movement, etc. Let’s try and get some sense of what the economic indicators looked like in the three month period between October to December 2018. In this piece, the yearly growth of 15 high frequency economic indicators has been looked at. These indicators include (and as can be seen from the accompanying table, which is in two parts) indicators like car sales, two-wheeler sales, commercial vehicle sales, non-oil exports, non-oil non-gold non-silver imports, revenue earning rail freight, among others. The performance of 11 out of the 15 economic indicators was much better during the period October to December 2017 than it was in October to December 2018. This basically means that the yearly growth of most economic indicators was better during the same period. In simple English, what this means is that the <keyword id="6356076" type="DEFINITION" weightage="20" keywordseo="indian-economy">Indian economy</keyword> has slowed down during the last quarter. Will this reflect in the government GDP numbers? That is something we will come to know later this week. These indicators are real time economic indicators and not a theoretical construct like the GDP number. Also, in a scenario where India grew by 8.2% during 2016-2017, the year of demonetisation, it makes more sense to trust real time economic indicators more than the GDP number declared by the government. Let’s take a closer look at some of these indicators. Take car sales, the most cited indicator among these indicators. During the period October to December 2018, car sales fell by 0.79% in comparison to October to December 2017. In fact, car sales had fallen by 2.42% during July to September 2018. 
 
 
 
 
 
 
 
 
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 Why are car sales important? That’s because they have been an important indicator of how urban India is feeling about its economic prospects. At the end of the day, no one is forcing an individual to buy a car. She buys a car only when she feels that she is in a position to service the EMI on the car loan taken to buy the car or make a down-payment. The fact that car sales have been falling tells us that urban India isn’t really feeling strong about its future economic prospects. Car sales also have very strong forward and backward linkages. When cars sell well, there is greater demand for steel, rubber, paint, glass, batteries etc. These are the backward linkages. A whole host of sectors do well, when cars sell well. The vice versa is also true. As far as forward linkages of car sales are concerned, a growth in car sales leads to an increase demand for loans, servicing centres as well as energy consumption. As we can see from the accompanying table, consumption of petroleum products went up by just 2.21% during the period October to December 2018, in comparison to a year earlier. This is again a clear impact of slowdown in car sales. 
 
 
 
 
 
 
 
 
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 Other than cars, a slowdown in scooter sales between July and December 2018, also tells us that urban India is not feeling too comfortable about its economic prospects. While scooter sales growth remained slow, the motorcycle sales growth seems to be on a recovery path. Between October and December 2018, it grew by 11.11%. 
 
 
 
 
 
 
 
 
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 This along with the fact that tractor sales during the same period grew by 22.24%, tells us that the rich part of rural India is feeling economically confident. The same cannot be said the agriculture sector as a whole, with fertilizer production falling 9.1% during the period. 
 
 
 
 
 
 
 
 
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 As far as consumer demand is concerned, non-oil non-gold non-silver imports, which are a very good indicator of consumer demand, grew by just 0.35% between October and December 2018. Tourist arrivals also grew by just 1.73%, in comparison to 14.81% a year earlier, which will act as a dampener on consumer demand. 
 
 
 
 
 
 
 
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 The production of steel grew by 4.64% during the period. A slowdown in car sales as well as a real estate sector which hasn’t gone anywhere in many years, went against the sector. 
 
 
 
 
 
 
 
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 What helped is the healthy pace of road construction. Between April and November 2018, 5,579 kilometres of highways were constructed, against 4,942 kilometres, during the same period in 2017. Road building also gave a fillip to cement production, which jumped by 13.33%. 
 
 
 
 
 
 
 
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 Exports remained weak during the period. Non-oil exports, which tend to benefit a large number of companies in comparison to oil exports, where the benefits are concentrated, grew by just 1.19%. Revenue earning rail freight saw a slight improvement in growth at 5.92%. Commercial vehicle sales grew by 6.7%, the slowest in six quarters. A fast growth in commercial sales indicates a robust activity on the infrastructure and industrial front. This is seen as a lead economic indicator of industrial as well as infrastructure activity. This is also borne out by data from Centre for Monitoring Indian Economy. During October to December 2018, the new projects fell by 24.14%. Completed projects fell by 8.35% and the stalled projects went up by 246.89%. All this comes together in the form of a major slowdown in central government revenue receipts, which grew by just 0.48% during the period, with the government also feeling the heat of the economic slowdown. All these economic indicators come together to tell us that the Indian economy has slowed down during the period October to December 2018. Whether this is captured in the GDP data which will be released on February 28, remains to be seen. In this scenario, even an economic growth of 6.6% doesn’t seem believable. In the recent past, the Indian GDP data has become more or less a joke. Let’s see if that continues or things do improve on that front. Vivek Kaul is a Business Insider India contributor. Kaul is an economist and the author of the ‘Easy Money’ trilogy. See also: <a href="https://www.businessinsider.in/india-corporate-earnings-will-slow-down-affecting-stock-prices/articleshow/68060649.cms">Indian companies have two tough years ahead — are the markets prepared?</a> <a href="https://www.businessinsider.in/indias-wholesale-inflation-cools-to-2-7-in-january/articleshow/67992193.cms">India's wholesale inflation cools to 2.7% in January</a> <a href="https://www.businessinsider.in/indias-government-wants-you-to-believe-that-demonetisation-didnt-slow-down-the-economy/articleshow/67785050.cms">India’s government wants you to believe that demonetisation didn’t slow down the economy</a>

Why even an economic growth of 6.6% is not believable

If <a href="https://rbi.org.in/SCRIPTS/BS_PressReleaseDisplay.aspx?prid=44136">the latest figures</a> from the Reserve Bank of India (RBI) are anything to go by, it seems that India is back to its hoarding ways as the amount of <keyword id="37885" type="ORGANIZATION" weightage="20" keywordseo="Cash">cash</keyword> held by the public is at a record high. After the short-term disruption caused by the government’s <keyword id="3315394" type="PERSON" weightage="20" keywordseo="demonetisation">demonetisation</keyword> initiative in late 2016 caused the amount of currency held by the Indian public to plummet to ₹7.8 trillion, data from the RBI shows this figure reached ₹18.5 trillion in the last week of May 2018 - a 31% year-on-year increase. This is even higher than the ₹17 trillion worth of money in public hands prior to demonetisation. From November 2016 to June 2017, Indians returned around ₹15.3 trillion worth of scrapped ₹500 and ₹1000 notes to banks. To supplement the shortfall in cash after demonetisation, the government has introduced a ₹2000 note and ₹200 note, as well as an updated version of the ₹500 note. As a result, the amount of cash held by Indians gradually increased over the course of 2017, crossing the ₹10 trillion mark in February and the ₹15 trillion mark in September. Fears of a cash crunch A likely explanation for the hoarding lies with the low level of public confidence in India’s banks as well as tax avoidance and the growth of alternative savings instruments like mutual funds. Earlier this year, a number of ATMs around the country started reporting shortages of cash, sparking fears that banks were facing a <keyword id="6355375" type="DEFINITION" weightage="20" keywordseo="Liquidity">liquidity</keyword> problem. In addition, the bad loan mess at India’s public-sector banks coupled with concerns that Indians could see the value of their deposits decline in the event that these banks undergo resolution has probably caused people to steer clear of them. The amount of cash held by the public at any given time is calculated by subtracting the total amount of cash held by banks from the total amount of cash in circulation. Concurrently, the total currency in circulation at the beginning of June 2018 was ₹19.3 trillion, more than double the ₹8.9 trillion that was circulating in the economy in early January 2017.

One and a half years after demonetisation, Indians are hoarding cash again

Housing sales have gone down marginally by 1% in <a href="http://www.businessinsider.in/thelife/real-estate/property-rates-in-top-eight-indian-cities-have-fallen/articleshow/57573937.cms">eight major cities</a> of India, falling to 28,131 units during January-March as compared to the previous quarter. This indicates at the demand for housing units slowly recovering from the impact of <keyword id="3315394" type="UNKNOWN" weightage="100" keywordseo="demonetisation">demonetisation</keyword>. Also read: <a href="http://www.businessinsider.in/financial-institutions-were-hit-hard-by-demonetisation-but-heres-why-bfsi-has-still-managed-to-sail-through/articleshow/57631451.cms">India's financial institutions were hit hard by Modi's demonetisation move, but here's why BFSI still managed to sail through</a> During the previous October- December quarter, housing sales stood at 28,472 units in Gurugram, Noida, Mumbai, Kolkata, Hyderabad, <a href="http://www.businessinsider.in/future-of-business/the-most-popular-parts-of-delhi-mumbai-and-bengaluru-where-people-invested-in-real-estate-in-2016/articleshow/56503428.cms">Bengaluru</a>, Pune and Chennai, as per data from the <keyword id="6354553" type="COMPANY" weightage="100" keywordseo="real-estate">real estate</keyword> data, research and analytics firm PropEquity. The report adds that launches of new homes fell 19.46% in the Q4 of 2017 to stand at 22,897 units from 28,428 units in the Q3 of 2016. "Overall the fall in demand and new launches of residential projects slowed down in the Q1 as impact of <a href="http://businessinsider.in/topic/demonetisation">demonetisation</a> on the real estate sector tapered down faster than the expectations," PropEquity said. Talking of <a href="http://www.businessinsider.in/thelife/real-estate/Stagnant-property-prices-cheer-home-buyers-become-headache-for-investors/articleshow/52201283.cms">prices</a>, housing prices declined by 1.67% to Rs 6,185 per sq ft as against Rs 6,290 per sq ft during the period under review. The report is hopeful about the coming months, saying that the housing supply would slowly pick up. (Image source)

Housing sales fall by 1% in top eight Indian cities

Finance Minister <keyword id="42575" type="PERSON" weightage="100" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> on Thursday played down the impact on <keyword id="47276" type="UNKNOWN" weightage="100" keywordseo="Economic-growth">economic growth</keyword> of the government's decision last November to scrap most of the cash in circulation, saying the annual rate of growth was "very reasonable". Jaitley spoke after data on Wednesday showed that India's economy, Asia's third largest, suffered a growth slowdown in the quarter to March, to 6.1 percent, well below the expectations of independent economists. He focused, however, on the growth figure of 7.1 percent in the 2016/17 fiscal year to March. "I do believe that in the current global situation, a 7-8 percent growth, which at the moment is the Indian normal, is very reasonable," he told a news conference. Looking ahead to the planned launch of a new <keyword id="6359833" type="ORGANIZATION" weightage="100" keywordseo="Goods-and-Services-Tax">Goods and Services Tax</keyword> (<keyword id="6354679" type="ORGANIZATION" weightage="100" keywordseo="GST">GST</keyword>) from July 1, Jaitley said the government was "in a state of preparedness" for the rollout. He said that the GST would add to the rate of economic growth. Jaitley also told reporters that resolving the issue of non-performing assets weighing down banks' balance sheets was a work in progress and a major challenge.

You Searched For "2016 Indian banknote demonetisation" and got 12 results

Rs 2,000 notes: 97.96% returned; Rs 7,261 crore worth notes still with public

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