Demonetization India Anniversary

On November 8, 2016, the country was in shock as a drastic step that changed everything overnight, financially that is, was taken by Prime Minister Narendra Modi. It has been a year now, since the time when Demonetisation, the most debatable issue was introduced to the economy. While people have been arguing over its positive and negative impact over the last one year, a report by Indian Express states that with the return of cash, the country saw a surge in gold. The customs and other investigative agencies reported that in the year since demonetisation, there has been a surge in gold smuggling at airports in the first five months of 2017.

A total of 260 smuggling cases were reported at the country's second-largest airport by passenger traffic in Mumbai from January-May 2017 which is double of the same period a year ago. The report further stated that 125.3 kg of gold worth Rs 33.71 crore was seized by the airport Customs in those five months as compared to the 66.73 kg gold worth Rs 17.26 crore seized a year ago. 243 kg of smuggled gold worth Rs 61.85 crore had been seized by the Air Intelligence Unit (AIU) of Mumbai Customs till October 2017 in a total of 564 cases. This numbers, is over 100 percent more than what AIU had seized during the same period a year ago. While Mumbai reported a 100 percent increase in the value of smuggling, the Hyderabad airport Customs registered at least 40 cases until August this year, against 10 cases in the same period a year ago.

A source on the condition of anonymity as quoted in the report said, "Demonetization put a temporary dent in gold smuggling largely because the currency was squeezed out of the system. Now, with remuneration, the smuggling racket is back in action. The rise in seizures of smuggled gold at airports between January and May 2017 indicates that the existing demand for gold is not being met through official channels."

As far as the currency in the banks are concerned, a drop from Rs 17,74,200 crore on November 4, 2016, to Rs 8,73,416 crore by January 6, 2017 in the circulation was reported as people rushed to the banks to deposit demonetized currency. By April 28, the currency in circulation had risen to Rs 14,06,968 crore.