Economic Affairs Secretary Subhash Garg told reporters today that the government will increase the printing of cash notes by five times to meet the acute cash shortage issue experienced in some parts of the country.
He further said that Rs 500 notes worth Rs 2,500 crore are being printed every day to meet the demands, which adds up to Rs 70,000 to 75,000 crore a month.
Garg also said that currency worth Rs 1.75 lakh crore is in the reserve. The printing of Rs 2,000 notes was stopped in the last few months as it had adequate stock worth Rs 6.7 lakh crore of these notes, he said.
He also spoke of the trend of hoarding Rs 2,000 notes that were circulated but not returned to the bank due to their high value. The real reason is yet to be investigated he said.
Following is the official press release from the Ministry of Finance addressing the issue and assuring that the situation will soon be normalized.
"There are reports of cash shortages and some ATMs running dry of cash or becoming non-functional in some parts of the country.
There has been unusual spurt in currency demand in the country in last three months. In the current month, in the first 13 days itself, the currency supply increased by Rs.45000 crores. This unusual spurt in demand is seen more in some parts of the country like Andhra Pradesh, Telangana, Karnataka, MP and Bihar.
The Government of India with the Reserve Bank of India have taken all steps to meet this unusual demand. We had adequate reserves of currency notes which have been used to meet fully the extraordinary demand generated so far. We continue to have in stock adequate currency notes of all denominations, including of Rs.500, 200 and Rs.100 to meet any demand.
The Government would like to assure all the people that there have been adequate supply of currency notes which have met entire demand so far. The government would also like to assure that it would be supplying adequate currency notes to meet even higher levels of demand if such demand were to continue in the coming days/months.
The Government is taking all steps to ensure that ATMs are supplied with cash and to get non-functional ATMs normalised at the earliest."
Inputs from PIB