Little publicised facts from the RBI Annual Report 2016-17

(1) As soon as the Annual Report of the Reserve Bank of India for 2016-17 came out, many had quickly cottoned on to the fact in Chapter 11 of the report:

Subject to future corrections based on verification process when completed, the estimated value of SBNs received as on June 30, 2017 is ₹15.28 trillion. [Chapter XI (6.2) (ii)]

This constituted 98.3% of the cancelled currency notes of denomination of Rupees 500 and Rupees 1000. Just to recall the math:

Currency in circulation as of Nov. 4, 2016: Rupees 17974.6 billion (Link)

Share of High Denomination Notes is 86.4%. This is based on the RBI statement in the Annual Report for the year ending June 2016:

In value terms, ₹500 and ₹1,000 banknotes together accounted for 86.4 per cent of the total value of banknotes in circulation;

That means estimated value of Rupees 500 and Rupees 1000 denomination notes was 15.53 trillion Rupees.

Now, 15.28 divided by 15.53 is 98.4%.

(2) This was also important for the media:

After adjusting the expenditure, transfer to ADF and CF and contribution of ₹0.04 billion to the statutory funds, the surplus transferable to the Government of India for the year 2016-17 amounted to ₹306.59 billion, (including ₹9.93 billion as against ₹10.35 billion in the previous year payable towards the difference in interest expenditure borne by the Government consequent on conversion of special securities into marketable securities). [Chapter XI (6.1) (v) (h)]

Just to refresh our memories, the Government of India had budgeted for Rupees 761.72 billion rupees as dividend from the Reserve Bank of India, nationalised banks, etc. [Link]

(3) There were some interesting things left out from media coverage of the Annual Report:

More Fake Indian Currency Notes (FICN) were detected in 2016-17 than in previous years – 762,000 pieces compared to 633,000 pieces in 2015-16 and 594,000 pieces in 2014-15 [Table VIII (8) – Link]

Further, the number of suspicious transactions reported by Banks, other financial institutions and intermediaries jumped more than four-fold from 106,000 in 2015-16 to 473,000 in 2016-17 (All figures rounded off to the nearest thousand). Surely, some of these would help tax authorities to trace unaccounted money.  [Table VIII (9) – Link]

(4) Household financial savings has risen to its highest level in six years:

Household Financial Savings

Source: Table II (1), Chapter II, ‘Economic Overview’, Reserve Bank of India Annual Report, 2016-17

(5) Stalled Infrastructure Projects have come down both numerically and in value terms:

Stalled Projects

Source: Chart II (5), Chapter II, ‘Economic Overview’, Reserve Bank of India Annual Report, 2016-17.

Of course, MINT newspaper that continues to track overalled stalled projects reports that they are at an all-time high. See here.

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