Notes in 500, 200 and 100 denominations are convenient for transactions. To help take care of the rising demand for these and avoid the cash crunch situations in recent times, Economic Affairs Secretary Subhash Chandra Garg told PTI that the printing of Rs 500 notes has been ramped-up to about Rs 3,000 crore.
He additionally said that the cash situation in the country is "quite comfortable" and extra demand is being fully met.
Speaking to PTI on the fundamentals of the economy, Garg said that an interest rate hike at the moment is not called for as there has not been any "disproportionate rise in inflation" or "extraordinary growth in output".
As per his review on the cash situation in the country last week, 85 percent of the ATMs were functional.
"Overall in the country, I think its (cash situation) quite comfortable. There is enough cash which is being supplied and there is an extra demand which is being fully met. I don't think there is any cash related crisis or problem at this point in time," Garg said.
Regarding Rs 2,000 notes, he said that Rs 7 lakh crore of Rs 2,000 notes were in circulation, therefore not requiring the new issue of Rs 2,000 notes.
"500 and 200 and 100 rupee note is people's medium of transaction. That's what people use, people don't find Rs 2,000 rupee note as a very comfortable medium for making transaction. 500 rupee notes are very adequately supplied. We have ramped up production to the level that it is about Rs 2,500-3000 crore a day. So, that is much more than any demand. People's need for transaction is being taken care of by these," he said.
Improvements in security facilities are also being made to ensure that notes are not being duplicated.
"In last 2.5 years, there have been fewer instances, almost non-existent instances, of high-quality fake notes being reported in the country. But still, RBI keeps on reviewing, finding out, adding new features," Garg said.
When asked about a monetary policy committee member favoring withdrawal of accommodative stance, he said: "We should go by what the real numbers are. Have you seen a disproportionate rise in inflation numbers? Have you seen extra ordinary growth in output which has reduced the output gap substantially? No. So, one should go by the fundamentals and wait for next policy announcement".
The next meeting of Monetary Policy Committee (MPC) is scheduled on June 4-5. The MPC meeting last month, headed by RBI Governor Urjit Patel, left the benchmark repo rate unchanged at 6 percent for the third time in a row.