Published:August 31, 2017 2:42 am
The Reserve Bank of India (RBI) spent a whopping Rs 7,965 crore to print new currency notes from July 2016 to June 2017, a jump of 133 per cent against Rs 3,421 crore in the same period of the previous year, in the wake of demonetisation of Rs 500 and Rs 1,000 notes. According to the RBI, the surge in expenditure during the year was on account of change in the production plan of printing presses due to the introduction of new design notes in higher denominations as well as the requirement of larger volume of notes for replacement of the demonetised currency.
“Furthermore, in order to ensure availability of banknotes across the country at the shortest possible time subsequent to the demonetisation, banknotes had to be frequently air-lifted from the presses to the issue offices of the Reserve Bank as well as directly to currency chests wherever feasible, which partly contributed to the increase in the cost of distribution of banknotes,” the RBI said.
The RBI introduced new Rs 500 and Rs 2,000 notes after demonetising old Rs 500 and Rs 1,000 notes on November 8.
“In order to improve availability, direct remittances were increasingly sent to various currency chests from the printing presses. More than 100 direct remittances were sent to currency chests in various issue circles,” the RBI said. Banks managing the currency chests were allowed to make inter-circle diversions at their discretion to even out cash availability, it said. There was reimbursement of cost for finished banknotes, work in progress, raw materials, etc. as the printing presses had to discontinue printing of Rs 500 and Rs 1,000 denomination banknotes which were withdrawn in November 2016.
The total supply of notes was 3.5 per cent higher than the indent placed with the printing presses for 2016-17, while the indent itself was higher by around 17.4 per cent than that of the previous year, the RBI said.
As a result of the high cost incurred for printing notes as part of remonetisation of currency and provisions, the total expenditure of the Reserve Bank increased by 107.84 per cent from Rs 14,990 crore in 2015-16 to Rs 31,155 crore in 2016-17, according to the RBI’s Annual Report, Supply of notes during the year at 29,043 million pieces was 37 per cent higher than the total supply during previous year (21,195 million pieces). Supply of higher denomination notes during 2016-17 was 13,702 million pieces as against 5,268 million pieces supplied in 2015-16, higher by 160 per cent, the RBI said.
In its Right to Information (RTI) reply to an application filed by The Indian Express, the RBI had said the Central Board discussed and approved the proposal to introduce Rs 2,000 notes on May 19 last year.
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