Why is there a shortage of cash in India
4hw.com.cn: in more than a year since the government of India issued the order to scrap banknotes, various social problems have emerged in endlessly. Recently, millions of people have been scrambling for banknotes all over India. Why is India short of banknotes? Let's have a look.
The Indian government, which has been accused by the media, said that 'almost all the money demand in the past three months has seen an unusual sharp rise'. In the first two weeks of April alone, it said, cash needs were as high as RS 450 billion ($6.9 billion).
In a statement, the Ministry of Finance said: 'the government is taking all measures to ensure that ATMs have cash and to normalize non functional ATMs as early as possible. '
Finance minister Arun Jaitley tweeted Tuesday that he had reviewed India's cash position and found that 'the currency in circulation is more than enough'. He added that the shortage was' being quickly resolved '.
The Treasury did not explain the sudden increase in cash requirements or respond immediately to requests for additional comments.
Closed ATMs and helpless citizens have been staged in Indian media, reminiscent of prime minister Narendra & middot; modi's ban on 500 and 1000 rupees of cash in 2016, after the shock ban.
Modi said at the time that the move was aimed at combating widespread tax evasion and digitizing India's economy, although experts were still debating whether those goals would be achieved.
The ban halted 86 per cent of India's currency circulation and pushed the cash dependent economy into turmoil for weeks. Some ATMs are still being retrofitted to replace banned cash with new 200, 500 and 2000 rupees notes, which could lead to current shortages.