Cash crunch again, five-fold hike in printing |
The government of India says it has ordered a five-fold increase in production of Rs 500 notes to total Rs 2,500 crore per day after at least six states, including poll-bound Karnataka, reported a serious currency crunch with several ATMs running empty. As Telangana, Andhra Pradesh, Gujarat, Madhya Pradesh and Bihar also reported a shortage, Union Finance Minister Arun Jaitley reviewed the currency situation in the country. Overall, there is more than adequate currency in circulation and also available with the banks. The temporary shortage caused by `sudden and unusual increase` in some areas is being tackled quickly. Department of Economic Affairs Secretary Subhash Chandra Garg told reporters that average monthly demand has more than doubled to Rs 40,000-45,000 crore from Rs 19,000-20,000 crore just a couple of months ago. Garg said the government has enough reserves to meet the demand, which could be due to a “shortage mentality” as people try to hoard cash. “In the last few days, the government has stepped up currency printing. As against Rs 500 crore worth of notes being printed per day, it is being increased to Rs 2,500 crore per day now in denomination of Rs 500, he said.
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