The government said on Tuesday it has managed to reduce currency circulation worth over ₹3.40 lakh crore with the implementation of demonetisation on November 8, 2016. It further said fake note circulation has dropped.

In a written submission to a question asked in the Rajya Sabha on Tuesday, Finance Minister Nirmala Sitharaman said the notes in circulation as on November 4, 2016, were worth ₹17,74,187 crore. On May 31, 2019, it stood at ₹21,71,385 crore.

The notes in circulation had grown at an average rate of 14.51 per cent year-on-year since October 2014.

At this rate, it would have increased to ₹25,12,253 as on May 31, 2019. “As the actual notes in circulation on May 31, 2019, are only ₹21,71,385 crore, demonetisation, followed by digitalisation and reduction of cash use in the informal economy, has succeeded in reducing the notes in circulation by as much as ₹3,40,868 crore,” she said.

The government has always maintained that the demonetisation decision had several objectives, such as eliminating black money, curbing the infusion and circulation of fake notes and thereby deterring the funding of terror and Left-wing extremism, facilitating the transition of India’s non-formal economy into a formal one and boosting digital payments to create a less-cash economy.

Sitharaman, quoting RBI reports, said the number of counterfeit notes detected in the banking system came down to 3,17,389 pieces in FY19 from as high as 5,22,783 pieces in FY18 and 7,62,072 pieces in FY17.

Counterfeit notes

“Demonetisation resulted in the curbing of counterfeit currency,” she said.

Digital transactions, in terms of value, increased to ₹188.07-lakh crore in September 2018 from ₹112.27-lakh crore in November 2016. In volume terms, they increased to ₹241.88 crore from ₹91.83 crore in the same period, she added.

The note-ban also had a significant positive impact on curbing violence, said the Minister.

Illegally held cash forms the major chunk of terrorist funding, and most of the cash held by terrorists turned worthless post demonetisation, she said.

Extradition of offenders

In a reply to another question, Sitharaman said the Enforcement Directorate (ED) is investigating criminal cases against 28 individuals. The individuals are either residing abroad or have left the country ahead of the ED probe. The government did not reveal the names of these individuals, but those of Mehul Chowksi, Nirav Modi and Vijay Mallya are already in public domain.

The Minister also said action has been initiated to bring these persons back to India.