Archive · 10 Nov 2025
India's Currency in Circulation Surges Post-Demonetisation, Despite Digital Push
Imagine a time when the government took away all the big Rs 500 and Rs 1,000 bills to fight bad money.
Suddenly, there was much less money in people's hands!
But over the years, people got new money, and sometimes, when big events happened like the pandemic, people wanted to keep more cash at home for emergencies.
Even though we now have apps like UPI to pay with our phones, many people still like to use cash for everyday things.
This is partly because some jobs and small businesses still work mostly with cash.
So, even though there are more ways to pay digitally, the total amount of paper money people are holding has actually gone up a lot since that big change in 2016.
Currency with the public has more than doubled to Rs 37.29 lakh crore since India's 2016 demonetisation.
Demonetisation in November 2016 aimed to curb black money, counterfeit currency, and promote digital payments.
The immediate impact of demonetisation included economic disruption, falling demand, and a decline in GDP growth.
The COVID-19 pandemic in 2020-21 saw a significant jump in cash accumulation by the public for essential needs.
Despite a push for digital payments like UPI, India's currency-to-GDP ratio remains higher than many other major economies.
- Who
- The Indian government and the Reserve Bank of India (RBI) alongside the public and businesses.
- What
- Currency in circulation with the public has more than doubled since the 2016 demonetisation, despite efforts to promote digital payments.
- When
- The trend is observed nine years after the November 2016 demonetisation, with current data up to October 17, 2025.
- Where
- India
- Why
- Factors contributing to high currency in circulation include renewed printing, greater hoarding, a persistent preference for cash in the informal economy, and a rush for cash during the COVID-19 pandemic. The currency-to-GDP ratio remains elevated due to these factors, despite overall economic growth and a push for digitization.
Government/RBI Push
Public Preference/Economy Factors
Cash vs. Digital Payments
Government/RBI Push
The government and RBI have promoted a 'less cash society' through digitization efforts and restrictions on cash usage.
Public Preference/Economy Factors
Despite these efforts, cash in the system remains high, indicating a persistent reliance on physical currency.
Currency to GDP Ratio Interpretation
Government/RBI Push
A lower currency-to-GDP ratio generally indicates a shift towards digital payments and formal financial systems, enabling smoother monetary policy and better inflation control.
Public Preference/Economy Factors
India's elevated currency-to-GDP ratio stems from its large informal economy, cultural preference for cash, limited card usage, and slower digital payment adoption compared to highly formalized economies.
- Demonetisation Date
- November 8, 2016
- Pre-Demonetisation Currency (Nov 2016)
- Rs 17.97 lakh crore
- Post-Demonetisation Low (Jan 2017)
- Rs 7.8 lakh crore
- Current Currency (Oct 2025)
- Rs 37.29 lakh crore
- Currency to GDP Ratio (2025)
- 11.11%
- UPI Transactions (Q1 FY26)
- 54.9 billion