If we see the use of various denominations over the period from 1970, we can find that the requirement for various denominations have undergone tremendous changes. The period from 1970-2013 is divided into four decades ( each 10 years) and trend analyzed. It will show that the requirement of middle valued denomination like Rs 5/- and Rs 10/- has not diminished much because this denomination is the most preferred for all kinds of transactions as handled by the small traders along with Coins like 1 and 2 , especially in rural areas and villages.
Demand for Rs 100/- and Rs 500/- has been on upswing reducing the handling of Rs 50/- denomination and preferred by salary earners, medium level traders and consumers at large, especially in urban areas. Rs 1000/- denomination is slowly catching up during 2000-1013 when more and more ATMs were put in use and much of the ATMs dispenses more of Rs 500/- and Rs 1000/- denominational Notes. Very few ATMs dispenses Rs 100/- denominational Notes. The overall picture indicates that the combination of Rs 10/-, Rs 100/- and Rs 500/- denominations are preferred by consumers in general more than other denominations.
(Ref: Graph prepared based on figures taken from the
Database on Indian Economy/ Time series publications/
Hand book of Statistics on Indian Economy/
Notes and Coins issued / Table 159)
Another interesting factor to be noted is how much money is held by the public out of the circulated Notes? When we compare the Notes issued/ circulated from 1970-71 to 2012-13 along with the data on Currency with the Public, it is evident that nearly 7 % to 9 % gap exist between circulated Notes and Notes with public. From 1970 to 2013 the total quantum of Notes circulated was 90167.66 billion rupees while the Currencies with public was 82798.84 billion rupees. This further strengthens the view that more liquid Cash in the form of Bank Notes are needed in a vast Country like India.
(Ref: Graph prepared based on figures taken from the
Database on Indian Economy/ Time series publications/
Hand book of Statistics on Indian Economy/
Notes and Coins issued / Table 159
and Average Monetary Aggregates /Part-1- Annual Series/Table 45)
Throughout the period from 1970-71 till 2012-2013 the gap between the total circulation of money vs the money with public has been hovering around 7 % to 9 % in between in terms of value in billion rupees. There could be error factor in calculations to the extent of 0.5 %
(Ref: Graph prepared based on figures taken from the
Database on Indian Economy/ Time series publications/
Hand book of Statistics on Indian Economy/
Notes and Coins issued / Table 159
and Average Monetary Aggregates /Part-1- Annual Series/Table 45)
..............Continued :8