Over ₹5 lakh crore of new-series notes have been supplied in the market and the Finance Ministry expects that nearly half of the ₹15 lakh crore of demonetised currency notes will be replaced by the end of December.

“In the next two to three weeks, the situation will considerably ease with the supply of more and more ₹500 notes,” said Economic Affairs Secretary Shaktikanta Das on Thursday. Beyond December 30, the situation would improve further, he added.

Prime Minister Narendra Modi had said on November 8 that it would require about 50 days to normalise currency supply.

Five weeks after Modi’s announcement, Das said the focus was now on printing more ₹500 notes, which, he claimed, would help bring the ₹2,000 currency notes, some of which are being hoarded by people, back into circulation.

“The initial focus was on supplying ₹2,000 notes, but now printing of ₹500 notes has been stepped up,” Das said, adding that the Reserve Bank of India (RBI) has also increased the supply of small-denomination notes by at least three times.

“Over and above the ₹1.6 lakh crore worth of ₹100 notes in the market, the RBI has circulated an additional ₹80,000 crore. The position is similar for notes in denominations of ₹10, ₹20 and ₹50,” he said.

Currency notes that have been seized from illegal accumulations are also being put back in circulation, he said. Action was being taken against people stashing new notes based on inputs by revenue authorities and the Financial Intelligence Unit, he added.

The government’s emphasis is also on providing cash to rural areas, where there have been reports of inadequate supply of money. “The distribution has been further streamlined. Airlifting of currency is being done where necessary,” Das said.

Rural thrust

The government is also ensuring that cash is available to district cooperative banks for crop loan disbursement. “We are in touch with district cooperative banks, NABARD and the RBI,” he said, adding that the extent of rabi sowing was almost the same as last year’s level.

Asked about the use of the Indian currency in Bhutan, Das said the RBI had given instructions for supply of cash to the Royal Bank of Bhutan. Further, a high-level committee has also given its report on the issue to the government and it is being examined.

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