There were flurry of articles towards end of India’s financial year on this murky term – currency in circulation. All these articles (article one , two and three)were looking at possible reasons for sharp rise of currency in circulation.
The question is why should anyone care? Well, one sees this circulation rising in times of high inflation as people need more money to settle transactions. But with declining inflation, one should not see a rise in the currency numbers.
First what is this Currency in circulation? This is basically all the paper notes we carry in our pockets. This along with rupee coins and small coins with RBI form currency in circulation. Rupee coins and small coins in the balance sheet of the Reserve Bank of India include ten-rupee coins issued since October 1969, two rupee-coins issued since November 1982 and five rupee coins issued since November 1985.
Next, what is the problem? See this table: