Economy to revive from demonetisation setback by June: Government

The government expects that the economy which experienced a major setback after demonetisation will take the path to revival by June 2017.

Economy to revive from demonetisation setback by June: Government

The government expects that the economy which experienced a major setback after demonetisation will take the path to revival by June 2017.

With more than Rs 10 lakh crore of new money pumped into the market and bank withdrawals already matching the money deposited each day, the Modi government hopes to catch the growth by June.

“We expect micro, small, medium enterprises, real estate sector and small traders who used to earlier deal with as much as 50% in unaccounted cash to join the growth wagon by June. As it is the private sector was not taking credit with investments limited to public sector in the pre-demonetisation phase,” a top government official told Hindustan Times.


According to the official, the government expects some Rs 75,000 crore of high-value currency to remain unaccounted with around Rs 14 lakh crore deposited into the backs of the Rs 15.60 lakh crore that was floating in the market.

“With no estimates available on the figure of high-value currency that will come from Nepal and Bhutan as well as some Rs 11,000 to Rs 12,000 crore that were deposited into cooperative banks due to confusion in the first four days, the exact figure of unaccounted money will take time to be calculated. Given that the RBI has only 60 machines that count, scan (for counterfeits) and shred the illegal tender, it will take the central bank 600 days to count the cash deposited in all of the machines that work 12 hours a day,” the official said.

Apart from the non-availability of estimates of currency to be deposited from Nepal and Bhutan, the government was also grappling to identify the black money deposited as white in banks through Jan Dhan, farmers accounts, dormant accounts, new accounts (some two crore new accounts were opened in 45 days post November 8, 2016).