Cash circulation in India rises 22% in 2020

New Delhi, Jan 28 : Cash circulation in India increased 22 per cent last year despite the pandemic, with rural areas seeing a resurgence.
According the CMS Cash index, currency worth Rs 27.78 lakh crore was in circulation as of December 2020, up from Rs 22.70 lakh crore reported a year ago.
It attributed the rise in cash circulation, to the printing of fresh currency by the Reserve Bank of India (RBI), monetary easing along with government’s subsidy distribution plans and spike in demand early pandemic for more cash in the economy to manage demand-supply.
As India moves fast towards a digital economy, cash remains essential in most parts of India and is an integral part of financial inclusion. Rural India is ahead of the curve and is expected to be better in Q4 FY21, CMS said.
The consumption in rural and semi-urban India is finding a way to support the overall economy of the nation. The government’s subsidy, disbursal and other benefit programmes have been running seamlessly and cash is getting into the hands of the majority of Indian population without lag, it added.
Rural and semi-metro areas are leading the resurgence of the cash circulation in the economy. They are more than what the year 2020 started with and are near 106 per cent while cash consumption is down to 76 per cent across major metros.