Even after six years of demonetisation, huge amount of unaccounted money is being caught

- Expected success is not met in controlling the amount of cash in hand

After six years of demonetisation in the country, on the one hand, the prevalence of digital payments is increasing, on the other hand, there is no decrease in cash transactions. India's premier digital payments platform, Unified Payments Interface (UPI), saw more than $7 billion in transactions in October, a record for a single month since the platform's inception. In October, 7.30 billion transactions worth Rs 12.11 trillion were transacted on the UPI platform. Year-on-year, October saw a 57 percent increase in transactions in terms of value while 73 percent in terms of volume.

Over the past two years, transactions through UPI have been increasing both in terms of value and volume, indicating the growing adoption of digital payments in India. On the other hand, the volume of cash circulating in the economy has also increased significantly during the six-year period of demonetisation. The amount of cash in the country which was Rs 17.97 lakh crore on November 4, 2016 has now increased to Rs 32.10 lakh crore. Thus, the high amount of cash in the hands of the people raises the question whether the demonetisation exercise or even the purpose of removing the black money taint from the country has been achieved.

On the one hand, the Government of India and the Reserve Bank are promoting digitization to reduce cash transactions, on the other hand, there is still no expected reduction in the amount of cash in hand in India, which cannot be denied from the figures obtained. There is no doubt that after the government announced the lockdown in 2020 due to Corona, instead of keeping money in banks, people thought it appropriate to keep more cash in their hands, but now when there is no situation like Corona, the high amount of cash in the economy indicates that the spread of black money has increased in the country.

A survey report said that the real estate sector, where the currency of black money is the highest in the country, is still being transacted in large amounts of cash. In a survey of property buyers in 2022 by a private firm, 44 percent admitted to having paid cash themselves for purchasing a property. In November last year, a survey was conducted of those who had bought property in the last seven years, in which 70 percent said cash transactions. In the survey of 2021, 16 percent of people said that they paid fifty percent of the value of the property in cash, while this figure was eight percent in the survey conducted in the current year. Thus, it is seen from the survey that even today there is a large currency of black money in real estate deals.

Before coming to power for the first time at the Center in 2014, the current government had vigorously raised the issue of black money and corruption in the country and promised to take measures to eliminate corruption and unaccounted money if its government comes to power, as part of which demonetisation was introduced in November 2016. To show the success of demonetisation, the government at that time was presenting the reduced amount of currency in circulation to the country as evidence. Within six years of demonetisation, the picture is changing again and cash transactions are on the rise. Due to the start of the festive season in October and the planned e-commerce sales, payments through UPI have seen an increase. Along with the increase in transactions through UPI, it is equally important to reduce the amount of cash in the hands of people. It would not be right to say that black money has been eradicated in the country as digital transactions have increased.

Things like economic uncertainty, banking norms, developments in the financial sector, income levels are becoming the reasons for maintaining cash in hand. In any country, black money spreads through corruption because corruption requires cash. Parties are also known to prefer to accept money in cash as the Election Commission monitors the expenditure incurred by political parties. When state assembly elections are scheduled in Himachal Pradesh and Gujarat, the possibility of an increase in the amount of cash in the country's economy is not ruled out. There are allegations of huge money transactions behind the coup in Maharashtra.

Special laws have also been in force for the past several years to monitor financial transactions above a certain amount, but the expected success is not being achieved in controlling the amount of cash in hand through the emergence of black money. Not only will the hoarding and transactions of cash in the country prove to encourage corruption, it will not take long to prove that exercises like demonetisation to bring black money into the banking system will fail.

In the period of 6 years after demonetisation, not only the income tax department is frequently declaring that huge amount of unaccounted money is being received from many business houses, government bureaucrats and politicians, there are also reports of seizure of fake currency notes from the economy. Thus it can still be said that the objectives behind demonetisation exercise are not fully achieved.