Demonetisation achieved its objective, says DEA secretary Subhash Chandra Garg

The central government on Wednesday said that its "decision on demonetisation achieved its objective quite substantially" whether it was about curbing black money, terror financing money, fake currency or promoting digital payments.

While defending the government's decision that wiped out 86% of the cash overnight about 21 months ago, economic affairs secretary in the finance ministry, Subhash Chandra Garg, said, "I think demonetisation achieved its objective quite substantially."

He was talking to reporters in the national capital after the Reserve Bank of India (RBI) released a report saying that 99.3% of the banned currency notes of Rs 500 and Rs 1,000 came back into the banking system post-demonetisation. The government is facing criticism over the results achieved by demonetisation considering the pain the economy went through after the decision.

On the question of RBI detecting spike in counterfeit notes, Garg said that the number of fake notes post note ban was very miniscule. "The (investigative) agencies have seized fake notes but they are of low quality. We are not worried about that kind of notes in the system. Anyone would know that these notes don't have security features. Nobody gets fooled by that. "

Elaborating further on gains post-demonetisation, the government said that digital transactions have gone up after the decision. "Digital payments are picking up. There are 25 crore transactions in a month on Unified Payments Interface (UPI)" Garg said.

The DEA secretary also stressed that there was no shortage of cash in the system. "There is no cash crunch anywhere in the country now. This was a temporary problem which was witnessed in the month of February and March. The problem does not exist any longer."

The cost of printing notes after demonetisation was Rs 8,000 crore. "Last year, the cost incurred on printing of notes and transportation came to Rs 8,000 crore, while normally it is Rs 4,000-5,000 crore," Garg said.