Despite a surge in the use of Unified Payments Interface (UPI) transactions across the country in the last four years, cash still rules India as people may be holding as much as Rs 3.3 lakh crore cash for various emergency purposes due to the outbreak of COVID-19 in the country, estimates a State Bank of India report.
“Our estimate shows that because of the outbreak of COVID-19, people may have held as much as Rs 3.3 lakh crores in cash for emergency purposes beginning FY21,” said SBI Research Desk’s report titled: A Guide to the formalisation of Economy since FY18.
The report further adds, “If we adjust for such current transactions, the currency to GDP ratio for pure payment purposes may have actually declined in FY21 as compared to the previous years.”
Data from the Reserve Bank of India showed that India has nearly touched Rs 29 lakh crore. The total value of cash in circulation has touched from Rs 28,26,863 crore to Rs 24,20,975 crore in 2020, a value increase of 16.7 per cent has been registered.
However, “the circulation of currency has decelerated sharply to 7.9 per cent in November 2021 from pandemic which influenced the cash surge of 22 per cent a year,” said MoS for Finance Pankaj Chaudhary.