Replying to a question in the Rajya Sabha about the government's plan to withdraw Rs 2000 notes in the future, Minister of State for Finance and Corporate Affairs, Anurag Thakur said, "This is the real worry (about demonetisation) which has surfaced now. I think that you should not worry about it."
He told the House that objectives of demonetisation were flushing out black money, eradicating Fake Indian Currency to strike at the root of financing of terrorism and Left-wing extremism, to convert non-formal economy to a formal economy to enlarge tax base and employment and to give a big boost to digitalisation of payments to make India a less cash economy.
Notes in circulation (NIC) as on Nov 4, 2016 were Rs 17,741.87 billion which have now increased to Rs 22,356.48 billion as on Dec 2, 2019, reported the Minister. The NIC had shown an average growth rate of 14.51% from Oct 2014 to Oct 2016 and should have increased to Rs 25,402.53 billion as on Dec 2, 2019.
However, since actual NIC is only Rs 22,356.48 billion, demonetisation followed by digitalisation and reduction of cash use in informal economy has succeeded in reducing NIC by as much as Rs 3046.05 billion.
The overall economic growth of a country is dependent on several factors including structural, external, fiscal and monetary and thus it is difficult to pinpoint the impact of any one particular factor on the growth rate of GDP, stated the Minister about impact of demonetisation on economic growth.