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Politics
10 Years After Demonetisation: Cash Use Stagnates, Counterfeit Notes Surge
✍️ The Hindu
🗓 08 Nov 2026, 11:17 AM
👁 13
A decade after Prime Minister Narendra Modi's overnight demonetisation, data shows that the intended shift away from cash has not materialised, while the circulation of counterfeit currency has risen.
On Deepavali, India marks 10 years since PM Modi announced the overnight demonetisation of ₹500 and ₹1,000 notes, which accounted for 86% of cash in circulation. The move aimed to curb black money, counterfeit currency and corruption.
Recent data from the RBI and the Ministry of Finance indicates that the proportion of cash transactions in the economy has remained largely unchanged over the decade. Digital payments have grown, but cash still dominates daily transactions, especially in rural and informal sectors.
A parallel trend is the rise in counterfeit currency. The RBI's annual report shows a 12% increase in the detection of fake ₹500 and ₹1,000 notes compared to the year before, suggesting that the demonetisation drive may have inadvertently encouraged counterfeiters.
Analysts say the policy's objectives—reducing black money and boosting the digital economy—have not been fully achieved. The government now faces pressure to strengthen anti‑counterfeiting measures while balancing the need for cash in the economy.
Recent data from the RBI and the Ministry of Finance indicates that the proportion of cash transactions in the economy has remained largely unchanged over the decade. Digital payments have grown, but cash still dominates daily transactions, especially in rural and informal sectors.
A parallel trend is the rise in counterfeit currency. The RBI's annual report shows a 12% increase in the detection of fake ₹500 and ₹1,000 notes compared to the year before, suggesting that the demonetisation drive may have inadvertently encouraged counterfeiters.
Analysts say the policy's objectives—reducing black money and boosting the digital economy—have not been fully achieved. The government now faces pressure to strengthen anti‑counterfeiting measures while balancing the need for cash in the economy.