ECONOMY

Ratio of Currency in Use Records 14.5% of GDP

The ratio of currency in circulation as the balance of GDP reached a record of 14.5 per cent for fiscal 2020-21 amid the raised demand for cash and a decreasing GDP. Proving that the shift to digital and cash concentration are not together exclusive, there is also an increase in every form of digital payment, whether it is Unified Payments Interface (UPI), credit and debit cards or FASTag. The post-pandemic rise in currency inflow has been a global event, defined as a ‘dash to cash’ under extreme change. And this has been experienced by the US, Spain, Italy, Germany, France, Brazil, Russia and Turkey too.

Meanwhile, digital payments are almost three times high than they were in FY18. The Reserve Bank of India’s (RBI) digital payments index has climbed to 270. This also attracts the spread of digital taking the growth in the payments support. Symbols show that the informal economy has narrowed to 20 per cent of GDP from 40 per cent.

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