Over a month has passed since Prime Minister Narendra Modi on November 8 announced the decision to ban the old Rs 500 and Rs 1000 notes. With India standing in unending lines waiting to withdraw money, Modi had promised that the hardships are short-lived and within 50 days, the cash crunch will end.
Less than a fortnight is left and the deadline for the leverage that he sought from India will end. But does it look like the situation will be back to normal? Unfortunately, No. As per the capacity of the printing presses of the Reserve Bank of India (RBI), Modi’s promise will remain an unfulfilled one.
As per data collated by Indiaspend, the government will take up to May 2017 even if it introduces Rs 9 lakh crore, which is 35% less money than what it pulled out from the economy. It could take an even longer time, at least until August 2017, if the government plans to reintroduce the entire Rs 14 lakh crore that it pulled out.
- – The central bank has just four presses in Dewas in Madhya Pradesh; Nashik in Maharashtra; Salboni in West Bengal; and Mysuru in Karnataka.
- As per the RBI, these presses can print nearly 7.4 crore notes in a day and abut 2,670 crore notes in a year.
- Even if they work in three shifts instead of two, the situation is likely to remain tense as the increase would still add up to 11.1 crore notes.
- What may add to the problems is that not all machines have the security features to print notes of high denominations, ie. Rs 500 and above. Thus only 5.56 crore notes of Rs 500 notes can be printed every day, even if all resources are targetted towards the same.