India’s digital payment revolution has not reduced cash demand. Currency in circulation continues to grow even as cash’s share in individual transactions declines
Cash offers instant settlement, no transaction cost and greater privacy. These advantages continue to make it attractive, particularly in rural and semi-urban India
Around 176 billion banknotes are in circulation. The RBI prints 28–30 billion new notes annually while disposing of about 21 billion damaged pieces
The cash-to-GDP ratio rose from 11.9% in 2015-16 to over 14% in 2020-21, despite the 2016 withdrawal of high-value notes. It stood at 11% in 2025-26
Persistent cash use may reflect India’s large informal economy. Cash-intensive sectors such as construction and real estate may also use it to evade taxes
Cash prevalence does not automatically mean black money. Convenience, privacy and low opportunity costs can also sustain demand. India’s unusually high cash use merits closer study