NITI Aayog Chief Excutive Officer Amitabh Kanth said that the cash crunch could be resolved by the middle or end of January 2017, with about Rs. 12 lakh crore in cash returning to the system by then. Mr. Kant also said that digital transactions and cash holdings could attract access.
Digital payments by debit or credit cards, for instance, attract a Merchant Discount Rate of 0.75 per cent to 1 per cent that has been waived as a temporary reprieve for cash-starved citizens, he added further. The increase in digital transactions will reduce the need for cash by about Rs. 2 trillion,” he said. Mr. Kanth also said that the economy needs Rs. 11-12 trillion in cash to finance normal transactions. This will be back in the system by mid-January or maybe the end of January.”