The government started acting belatedly on Tuesday in response to reports of cash shortages from States including Telangana, Andhra Pradesh, Karnataka and Madhya Pradesh over a fortnight. The Ministry has asserted that over ₹1.75 lakh crore of cash lies in reserves, which may now be deployed to meet the demand. At the same time, it blamed the shortages on logistical issues of replenishing ATMs and said it is moving more cash to regions that witnessed high cash withdrawals. Theories abound on how upcoming elections, starting with Karnataka and possibly ending with the Lok Sabha polls in 2019, have prompted a large-scale cash management exercise among political parties. The current cash crunch shows how the consequences of the overnight demonetisation of November 8-9, 2016 continue to haunt us.

Source: The Hindu April 18, 2018 18:33 UTC