The total “currency in circulation” in India has jumped by 19.14%, from Rs 17.97 lakh crore on November 4, 2016, four days before demonetisation, to Rs 21.41 lakh crore as on March 15, 2019. Citing the latest data from the Reserve Bank of India, The Indian Express reported that currency in circulation had first crossed pre-demonetisation levels in March 2018, when it rose to Rs 18.29 lakh crore. In the year since then, the amount of cash in the economy has risen by a further Rs 3 lakh crore.

After the central government suddenly demonetised currency notes of Rs 500 and Rs 1,000 and froze 86% of circulating cash in the economy overnight on November 8, 2016, currency in circulation had fallen to Rs 9 lakh crore in January 2017. Since one of the government’s stated aims of demonetisation was to make India a more cashless economy, the latest RBI data indicates that cash is back with a vigour in the country’s financial system.

The government had first stated that the purpose of demonetisation was to retrieve black money circulating in the economy. However, in August 2018, the RBI reported that 99.3% of demonetised money had been returned into the system, raising questions about the effectiveness of demonetisation to crack down on black money.

Demonetisation, which is reported to have caused unprecedented disruptions in the lives of ordinary people, was also meant to promote the use of cashless or digital payments in India. However, in the years since demonetisation, reports indicate that the move did not succeed in popularising digital payments in the economy.