Demonetisation in India
On 8th November 2016,the Prime Minister Shri Narendra Modi announced demonetisation of Rs. 500 and Rs. 1000 notes that represent 86.4% of the currency in circulation
1. Corruption in India
India is the 76 least corrupt nation out of 175 countries, according to the 2015 Corruption Perceptions Index reported by Transparency International. Corruption Rank in India averaged 75.14 from 1995 until 2015, reaching an all time high of 95.00 in 2011 and a record low of 35.00 in 1995.
Source http://www.tradingeconomics.com/india/corruption-rank
2. Counterfeit Currency in India
Only data available in public domain is the number of counterfeits detected/recovered in the banking system including the note processing system of RBI, which are published regularly in RBI Annual Reports. After 2007-08, however, RBI has stopped disseminating statistics on counterfeiting by denominations. So, for recent period, one can only analyse the aggregate numbers.
To begin with, let us take the example of aggregate counterfeit notes detected in the banking system in the recent years. During 2007-08, the number of counterfeits detected in the banking system jumped by 86.9 per cent, from 1,04,743 pieces in 2006-07 to 1,95,811 in 2007-08. On top of this, during 2008-09, aggregate detection more than doubled (103.3 per cent) to 3,98,111 and subsequent growth witnessed a moderation in the recent years (Table 1). It may be noted that during 2008-09 notes in circulation (NIC) increased by 10.7 per cent when counterfeit notes detected in the banking channel increased by 103.3 per cent. By examining the data on counterfeiting reported through the banking channel, one can assess the threat to some extent; but quantitatively it could be an underestimate of the reality.
Table 1: Counterfeit currency notes detected in the banking system | ||||||
(Number of pieces, y-o-y growth) | ||||||
Items | 2007-08 | 2008-09 | 2009-10 | 2010-11 | 2011-12 | Average |
| 1. Notes in circulation (NIC) (million pieces) | 44225 | 48963 | 56549 | 64577 | 69382 | 56739 |
| 2. Notes in circulation of higher denomination (Rs.100 and above) (million pieces) | 20131 | 21788 | 23509 | 25957 | 27844 | 23846 |
| 3. Counterfeit notes detected (No. of pieces) | 195811 | 398111 | 401476 | 435607 | 521155 (19.6) | 390432 |
| 4. Counterfeit notes per million NIC [(3)/(1)] | 4.4 | 8.1 | 7.1 | 6.7 | 7.51 | 6.9 |
| 5. Counterfeit notes vis-à-vis per million of higher denominated notes(*) [(3)/(2)] | 9.7 | 18.3 | 17.1 | 16.8 | 18.2 | 16.4 |
| Note: (i) Figures in parentheses are year-on-year growth in percentage terms. (ii) (*) Assumes negligible incidence in counterfeiting of lower denominations. Source: RBI Annual Report, various years | ||||||