New Delhi, April 5

The amount of cash in circulation in India has swollen by more than $7 billion, the central bank governor said today, as he appeared to suggest that vote-buying at state elections may be one reason.

Reserve Bank of India (RBI) Governor Raghuram Rajan said the amount of cash in public hands was INR 500 billion to INR 600 billion higher than anticipated at this time of year, with no clear explanation.

However, the bank governor hinted that the increase may be connected with a flurry of elections underway or due soon in states including West Bengal, Assam, Kerala and Tamil Nadu.

“On the reasons for excess cash, we are trying to understand it,” Rajan said following the RBI’s bi-monthly monetary policy meeting. “We see some possibility of — you know, around election time cash with the public does increase, you can guess as to reasons why. We also guess.”

While the RBI governor did not go into detail or mention corruption, cash-for-votes scandals frequently mar state elections in India.

“You see some (increase in cash) not just in the state which is going for elections but also in neighbouring states. There is something there, we need to understand it better,” Rajan said.