Headlines "102% increase in fake notes in 2022" and the actual truth behind it.


On May 29th, our esteemed opposition leader attacked the govt and particularly PM Modi for the failed demonetization. [India Today] They were based on widely circulated report that the fake notes of 2000 and 500 had increase 50% and 100% respectively. Some of the headlines were eye catching

·       Cash you hold could be fake.

·       Banking Central | Counterfeit notes are back in full swing and that’s worrying

·       This denomination saw the highest increase in counterfeit notes in FY22

This could be bad news for the Indian economy and as I am interested in numbers, I decided to dig deeper.  One thing which struck me as I looked at other new reports was none of them reported about the magnitude of the problem. For example during demonetization in Nov 8th 2016, the estimated amount of notes in circulation was Rs 15,44,000 Crs. [PTI news].

The top 5 pages of google results had very similar headlines from the top Indian news papers including Hindu & Times-of-India. Another interesting thing to note was they all pointed the source to PTI (however I could not find this press release on the PTI official website)

I had to dig deeper and go to the RBI annual report. It took me 2 minutes to find the actual report and find the original data. [RBI]. While the report had shown increase in fake notes, the actual amount was very small. The total fake note value detected in 2021-22 was Rs 8.2 Cr, compared to value of notes circulated is Rs 3,105,721 Cr ( 0.00027% of the value). From a pure volume perspective, the total fake notes detected in 2021-22 was 2.3 Lakhs and in circulation was 1,305,326 Lakhs (0.00017%). [More details in Appendix A]

 Is this something that govt of India should be worried? Does this symbolize a failed demonetization? Should this be something that every citizen should be worried? I think anyone who has the basic intellect can figure out for themselves once given the actual data and not headlines.

I know that many journalists in India who proudly claim that they are number blind, but what about the business journalist. I wonder if the esteemed politicians who make such statements in parliament and to general public, cannot do a quick fact and data check. Are they purposefully misleading citizens or they are willfully negligent.

Hence my advice to everyone is please find out the actual numbers before you believe in any of the hysteria they cause. If you have reached the end, thanks for reading. Please feel free to share/copy-paste/rewrite this as I want everyone us to challenge the journalists and politicians and make them more accountable.

Appendix A

 

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