On November 8, a decade ago, Prime Minister Narendra Modi announced the scrapping of ₹500 and ₹1,000 notes. While digital payments now account for over 98 per cent of transactions, cash in circulation made a full comeback. This cash paradox shows that fake notes still exist despite these major changes.
On November 8, a decade ago, Prime Minister Narendra Modi announced the scrapping of ₹500 and ₹1,000 notes to curb black money, remove counterfeit currency and make India a less cash economy. The two notes accounted for over 86 per cent of the currency in circulation (CiC) at that time. Over a period of past 10 years, digital payments have moved far ahead. They now account for over 98 per cent of payments in both volume and value. While digital economy leapfrogged, CiC also made a full comeback. This is known as "cash paradox." But the cash in people's hands is not the same. Today, a new ₹500 note alone makes up about 86 per cent of the value of notes. The government also introduced ₹2,000 note at the time of demonetisation, which made up half the value in FY17, slipped every year until its withdrawal was announced in 2023. Fake notes have not gone away either. In the year demonetisation was announced, 0.76 million pieces were detected. By FY26, the count was about 70 per cent lower, yet it was the highest in the past four years, with the ₹500 note making up over 60 per cent of fake notes.