Business India

Government never expected spiked currency not to come back: Official

Rejecting criticism after the RBI indicated that almost 99 per cent of demonetised currency returned to the banking system, Economic Affairs Secretary Subhash Chandra Garg on Thursday said the government never said it didn’t expect it to come back and ruled out any more window period for exchange of old notes.

“There was clear expectation that much of it (demonetised notes) will come back. Whether all of it will come — people had different estimates and guesses. But the Centre never said it expected any currency not to come back,” Garg told the media here.

Asked if people could get another deadline for depositing scrapped currency of Rs 1,000 and Rs 500 that they might be left saddled with, he said: “At this point, no way.”

Most families had high-value currency and they used it for making payments as a way of exchange, Garg said.

On the November 8 demonetisation, the RBI on Wednesday said that of the Rs 15.44 lakh crore of notes taken out of circulation, Rs 15.28 lakh crore, or almost 99 per cent, returned to the system by way of public deposits.

Thus, only Rs 16,000 crore worth of old currency did not return to the banks.

Talking about the Reserve Bank of India dividends for 2016-17 reducing to less than half of what it paid in the previous year due to demonetisation costs, Garg said the government was in discussion with the RBI for more.

“In the Budget, we had estimated (it to be) Rs 58,000 crore. The RBI has calculated a surplus of Rs 44,000 crore. The RBI has transferred Rs 30,000 crore to the government. We are discussing with the RBI whether there is scope for more transfers as we have our Budget estimate at Rs 58,000 crore,” he said.

The RBI this month approved the transfer of surplus to the government, totalling Rs 30,659 crore for the year ended on June 30, 2017. The central bank had in the previous year paid Rs 65,876 crore dividend to the government.

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