India leads in digital financial transactions, but cash in circulation has more than doubled in the last eight years. According to RBI, the currency in circulation increased significantly after the 2016 demonetization of Rs 1000 and Rs 500 notes. The cash in circulation stood at Rs 34.70 lakh crore as of September 6, 2024, up from Rs 16.5 lakh crore before demonetization.
Demonetization aimed to eliminate black money and encourage digital payments. After demonetization, the value of banknotes in circulation fell by 20.2% by March 2017.
UPI transactions increased tenfold, from 12.5 billion in 2019-20 to 131 billion in 2023-24, making up 80% of digital payment volumes. A PwC report predicts digital transactions will grow from 159 billion in 2023-24 to 481 billion by 2028-29. UPI payments grew by 45% annually, with transaction values exceeding Rs 20.65 trillion for three consecutive months. In July 2024, daily UPI transactions averaged Rs 66,590 crore.
Experts suggest the rise in cash is due to economic growth and low-value transactions avoiding GST.
