Published: Fri, April 20, 2018
Worldwide | By Gretchen Simon

'Temporary shortage' of cash is being tackled quickly, assures FM Jaitley

'Temporary shortage' of cash is being tackled quickly, assures FM Jaitley

That's why it may take around seven days for the supply to beat the demand. The cash crunch continued on Wednesday too despite the government's assurances that the situation is "improving".

The government had blamed the "unusual spurt in currency demand" in the country in last three months for the cash shortage.

Referring to the government's demonetisation decision in November 2016, when the government had announced withdrawal of the then Rs 500/1000 notes and subsequently introduced new Rs 2,000 notes, Yechury said the country is still paying the price of "a sudden midnight Firman (order) of demonetisation".

Meanwhile, the people in various parts of the country, including Delhi, Karnataka, Andhra Pradesh, Rajasthan, Uttar Pradesh, Madhya Pradesh, Telangana, Maharashtra, among others have been unable to withdraw cash from some ATMs. These are the pockets where the crisis started as Rs 2,000 notes were fewer and Rs 200 notes couldn't be dispensed. And the only party flush with cash is the BJP: "People suffer", he said in one of the tweets. "We have around Rs 1.75 lakh crore worth of currency in reserves".

But with hash tags #cashcrunch and #ATM trending on Twitter all day, Opposition leaders launched a scathing attack on the government. So in a month, we will be printing about Rs 70,000-Rs 75,000 crore. "The temporary shortage caused by sudden and unusual increase in some areas is being tackled quickly and effectively", he said. The government would also like to assure that it would be supplying adequate currency notes to meet even higher levels of demand if such demand were to continue in the coming days/months.

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SBI Chairman Rajnish Kumar also stepped in to allay fears, telling a TV channel that "there has been adequate supply of currency from the RBI".

Now the currency in stock is about Rs 2 lakh crore and the reserves are adequate to meet any unusual spurt in demand, he said. One reason for the spurt in demand was the different festivals observed by people in nearly every states like Baisakhi, Bihu and others marking the solar new year.

He said there are rumours floating around suggesting currency shortage in the country but the fact is otherwise.

Demand for cash also went up in many states due to the harvest season when farm wages are paid in cash and most labourers prefer to get cash in smaller denomination. "Demand for cash has been rising". On Tuesday, the Congress followed suit, with party chief Rahul Gandhi calling the latest cash crunch the result of the Modi government's weak banking system. "Is there a Financial Emergency going on in the country?" she asked in a tweet.

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