Currency in circulation remains unchanged during Diwali week: SBI

Currency in circulation remains unchanged during Diwali week: SBI

SBI said currency in circulation (CIC) remained stable during the Diwali week this year despite record buying, indicating that there has been a pick-up in payments through digital modes. Within digital payments, it is UPI that is receiving the currency and this can be used for real-time policy making, it advised.

SBI Group Chief Economic Adviser Soumya Kanti Ghosh said, “The latest circulation data shows that it has remained stable over the previous year, with a record purchase of Rs 1.25 trillion during Diwali. This is the first time since 2014. Happened.”


The study showed that the currency in circulation during the Diwali week in 2021 stood at Rs 43,900 crore, which was more or less stable compared to Rs 43,800 crore in the year-ago period.

The study noted that within the digital mode, Indian consumers have now migrated in large numbers to better technology platforms such as UPI, which do not require the intervention of POS machines and factor authentication.

In the month of October 2021, 3.5 billion transactions worth Rs 6.3 trillion were registered through UPI, representing a 100 per cent jump in transaction volume and a nearly 103 per cent increase in their value.

UPI transactions have increased 69 times since 2017, while debit card transactions indicate people’s preference and shift to UPI mode.

“Indian consumers now prefer the convenience of payments through the click of a button. The vast amount of information produced as a passive by-product of the use of such UPI transactions serves as a transformative resource for real-time policy and evidence. holds a great promise in policy based policy making,” the study said.

It added that as convenience in payments takes center stage, the future will rapidly move towards large scale use of data through the use of artificial intelligence and machine learning by banks to redefine financial intermediation. And that would mean further spurring of larger investments in cloud platforms. ,

It may also require regulatory intervention by both the central bank and the government, so that the database can be accessed and stored and also used for real-time policy making.

Currency in circulation (CIC) as a percentage of GDP has climbed again, after falling to 8.7 per cent of GDP after demonetisation. However, this may be partly due to a contraction of 7.3 per cent of GDP during FY2011. Its effect is also visible in the GDP in the current financial year.

Had the situation been normal, the nominal GDP growth in FY 2011 and FY 2012 would have been much higher and the CIC as a percentage of GDP would have been much lower if the impact of the pandemic on currency holding was not taken into account.

“Our estimate is that without the GDP decline without the pandemic, the CIC/GDP ratio would have been 12.7 per cent, as against 12.4 per cent in FY2011,” Ghosh said.

He said his estimates also suggest that people may have up to Rs 3.3 trillion in cash as a precaution due to the pandemic, which means that the currency to GDP ratio has actually declined in recent days. Is.

Meanwhile, the tax-to-GDP ratio increased from 10.5 per cent in FY16 to 11 per cent in FY19 and has since backfired as the exemption limit was raised to Rs 500,000 in the FY20 budget.

SBI Research said, “But critics tend to miss such tax changes and attribute the declining tax/GDP ratio after FY19 as an example of less formality.”

                                                    </div><div style="background: #fee8dd; padding: 12px; border: dashed 1px black; margin-bottom: 20px;">

mail Dear reader,

Business Standard has always worked hard to provide updated information and commentary on events that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only reinforced our resolve and commitment to these ideals. Even during these difficult times arising out of COVID-19, we are committed to keeping you informed and updated with relevant news, authoritative views and sharp comments on relevant relevant issues.
However, we have a request.

As we grapple with the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. Subscribing to more of our online content can only help us achieve our goals of providing you with better and more relevant content. We believe in independent, unbiased and credible journalism. Your support through more subscriptions can help us practice the journalism we’re committed to.

support quality journalism and Subscribe to Business Standard,

digital editor

,

—-*Disclaimer*—–

this is an unedited and auto-generated supporting article of the syndicated news feed are actualy credit for owners of origin centers. intended only to inform and update you about Sakari naukri , result , UPSC , Exam Jobs etc. for Provides real or authentic news. also Original content may not have been modified or edited by Rojgar samachar team members.

Leave a Reply