MUMBAI, Aug 29 - Almost all the 500 and 1,000 currency notes that were made illegal in November 2016 have returned to the banking system, the RBI said today, prompting the Opposition to question the efficacy of demonetisation in curbing black money.
Banks received Rs 15.31 lakh crore or 99.3 per cent of the Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes that were in circulation on November 8, 2016 � the day when the note ban was announced, according to the RBI.
This means that just Rs 10,720 crore of the junked currency notes did not return to the banking system. Initial estimates had pegged that around Rs 3 lakh crore worth demonetised notes would not return to the system as they might have been stashed away illegally to avoid tax.
The RBI, which has taken over two years to count the currency notes that were returned in the limited period window provided by the government to exchange or deposit the demonetised notes, said in its 2017-18 annual report that the exercise is finally over.
The government vehemently defended the note ban decision, which sucked out 86 per cent of the currency in circulation, saying the move was not intended to confiscate money but to bring it into formal channels and tax them.
�I think demonetisation has achieved its objective quite substantially,� Economic Affairs Secretary Subhash Chandra Garg told reporters in New Delhi.
On whether the objective of reducing black money was achieved, he said, �yes.�
Former Finance Minister and senior Congress leader P Chidambaram was quick to pounce on the data to attack the government saying every rupee barring a small sum has come back to the RBI.
�Remember who had said that Rs 3 lakh crore will not come back and that will be a gain for the government!?,� he tweeted.
He said he suspected that the bulk of the currency not returned may be lying in Nepal and Bhutan, where Indian currency is acceptable, and some that may have been lost or destroyed.
Stating that the country paid a huge price for demonetisation, he said, �Indian economy lost 1.5 per cent of GDP in terms of growth. That alone was a loss of Rs 2.25 lakh crore a year.�
�Over 100 lives were lost. 15 crore daily wage earners lost their livelihood for several weeks. Thousands of SME units were shut down. Lakhs of jobs were destroyed,� he said in another tweet.
After November 8, 2016, the government provided a limited period window to first exchange any cancelled currency notes in possession and then deposit them in bank accounts.
Also, the junked currency notes were allowed to be used for buying petrol and diesel at petrol pumps, paying for hospital and electricity bills as well as bus fares on state road transport buses, among others.
The currency notes returned is a combination of deposits made in banks and notes exchanged. � PTI