Cash-to-GDP ratio: Why less cash in itself may not necessarily mean less black money | The Indian Express

Cash-to-GDP ratio: Why less cash in itself may not necessarily mean less black money | The Indian Express

Cash-to-GDP ratio: Why less cash in itself may not necessarily mean less black money

A lower ratio could be due to a combination of factors — lower currency supply, shrinkage in cash-dependent enterprises due to the note ban, and shortage of cash in pockets of the economy.

Written by Sunny Verma | New Delhi | Updated: November 8, 2017 8:33 am

Economists say reading the ratio in isolation could be misleading.

The government has presented a lower cash-to-GDP ratio as a key achievement of demonetisation, and a measure of black money being checked. Economists, however, caution against reading this metric in isolation.

RELATED NEWS

• 

  Congress looted country since Independence: Rijiju

• 

  One year after demonetisation: Country’s first cashless village goes back to cash

• 

  Demonetisation: In U-turn, face of note ban Nand Lal now says exercise benefitted the public