DNA Money Edit: Push online transactions with incentives to check hoarding

A sudden but unusual spurt in demand for currency in the country seems to have caught the government and the banking regulator unaware. The economic affairs secretary Subhash Chandra Garg said the government has taken steps to increase the supply of currency notes to counter any further increase in demand.

Interestingly, there is around Rs 18.4 lakh crore worth of currency in circulation at present, a little over it was at the time of demonetization in November 2016. According to the finance ministry, a spurt in demand was seen in some parts of the country like Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar. As it rightly assumed, people may be hoarding cash for the fear of a shortage in the availability of currency in near future. The government is repeatedly claiming that there is no shortage and that there is no cash crunch.

As the economy grows, there is surely an increase in demand for cash. At the same time, the growth of digitalisation and online transactions has slowed down, widening the gap between the expectations and the reality. The government needs to provide some incentives to encourage people to go for online transactions. A probe will throw light on any organised hoarding by individuals to fund the upcoming elections.