Cash crunch: Principal Economic Advisor Sanjeev Sanyal blames social media for panic withdrawal

New Delhi: A day after several parts of Andhra, Telangana, MP, Bihar, UP, Punjab, Chhattisgarh and poll-bound Karnataka reported cash shortages at ATMs and banks, Principal Economic Advisor Sanjeev Sanyal blamed the social media for the panic and the consequent urge among people to draw maximum cash.

“Sometimes due to long weekends this disruption happens. The social media has been instrumental in this panic, but we are trying to reach out the issue. Sanyal told Zee Media.

Stating that there could be several reasons for the cash crunch, he said. “The demand of cash goes ups and down but since last 2-3 weeks the demand has surged unusually. But I assure that the situation will become normal soon,”.

The delay in recalibration of cash vending machines to dispense Rs 200 notes is understood to be one of the reasons for the currency shortage in some parts of the country. Meanwhile, the printing of Rs 2,000 notes has also been halted for a past few days.

“RBI and government priority is to print small notes and Rs 2000 notes, but the government feels that Rs 2000 notes are sufficient in the current situation. We have many options if we find that Rs 2000 notes are being hoarded,” he added

Defending the currency circulation he said that our economy has expanded in 2 years but pre-demonetisation level the ratio is still low. Meanwhile digital transaction has expanded may fold.

“Currency availability is more a management issue than a policy. But after analysing if we find that there is systemic failure, we will take steps,” Sanyal said.

The RBI on Tuesday said shortage "may be felt" in some pockets largely due to logistical issues of replenishing ATMs frequently adding that the recalibration of ATMs being still underway.

Denying that there is any shortage of currency in circulation, Finance Minister Arun Jaitley also said that the "temporary shortage" in certain states is being "tackled quickly" and that there is "more than adequate" currency in circulation.

"Overall there is more than adequate currency in circulation and also available with the banks. The temporary shortage caused by 'sudden and unusual increase' (in demand) in some areas is being tackled quickly," he tweeted on Tuesday.