Yes, Rs 2,000 notes are slowly disappearing: All you need to know
This time, the discussion has been sparked by a SBI report and finance ministry data.
It came, it saw, it floundered. From the day it was launched, the Rs 2,000 note has had a tumultuous life. In its early days, it had to bear more than its fair share of criticism from a public frustrated by demonetisation, and ever since, the buzz that it is going to be withdrawn does the rounds every few months.
This time, the discussion has been sparked by a SBI report and finance ministry data, which show that the Reserve Bank of India is either not printing Rs 2,000 notes, or not circulating them.
An SBI Ecoflash report on December 20 has been quoted as saying that the value of small denomination currency in circulation up to March 2017 was Rs 3,501 billion. This implies that the value of high denomination notes was equivalent to Rs 13,324 billion as on December 8, after netting out the small denomination notes from the currency in circulation on that day.
Now, as per the Ministry of Finance in the Lok Sabha recently, the RBI has printed 16,957 million pieces of Rs 500 notes and 3,654 million pieces of Rs 2,000 notes as on December 8. The total value of such notes translates into Rs 15,787 billion.
“This means that the residual amount of high currency notes (Rs 15,787 billion-Rs 13,324 billion) of Rs 2,463 billion may have been printed by the RBI, but not supplied in the market,” said the report authored by Soumya Kanti Ghosh, group chief economic adviser, State Bank of India.
“As a logical corollary, as Rs 2000-denomination currency led to challenges in transactions, it thus indeed seems that RBI may have either consciously stopped printing the Rs 2000 notes/or printing in smaller numbers after initially it was printed in ample amount to normalise the liquidity situation,” said the SBI report.
Thus, if you have recently withdrawn money and received Rs 500 notes or Rs 100 notes, there is more than your luck at play.
However, reports of the RBI not printing the Rs 2,000 notes had also been heard around six months ago, when a shortage of the high-denomination notes had led to fears of hoarding.
In July, Livemint had reported that the RBI “stopped printing Rs 2000 notes about five months ago and is unlikely to print more in the current financial year… but has stepped up the printing of other denominations, including new Rs 200 notes”.
It had quoted an unnamed source as saying that: “Most of the printing that’s being done, about 90 per cent is only Rs 500 notes. Nearly 14 billion pieces of new Rs 500 notes have been printed so far.”
The question had also been raised in Parliament. On July 26, Samajwadi Party’s Naresh Agrawal had said during the Zero Hour, “The government has taken a decision to scrap the Rs 2,000 note. The RBI has been given orders not to print the Rs 2,000 notes ... If any policy decision has been taken during the Parliament session, the tradition is to announce it in the House.”
Leader of Opposition in Rajya Sabha, Ghulam Nabi Azad, too had asked: “Every day we read about coins of Rs 1,000, Rs 100 and Rs 200. What is the actual status? Are we to go by what media is writing? The House is to be enlightened by the finance minister. What is the truth? Are we going to have coin of Rs 1,000? To carry coins, we have to purchase a bag. We must know. Our sisters have the purse. We shall also have to buy purse just to carry the coins of Rs 1,000.”
However, finance minister Arun Jaitely had chosen not to clarify the government’s stand.
It was a few days later that minister of state for finance, Santosh Kumar Gangwar, had told IANS there was no news of scrapping the Rs 2,000 note.
This time, no clarification has so far come forth from the government.
Some quarters have argued that the Rs 2,000 note had been a temporary arrangement the government resorted to in order to replenish cash into an economy left gasping after the old Rs 500 and Rs 1,000 notes were demonetised.
The high-denomination note is naturally inconvenient to use, with few retailers willing to accept it, and flies in the face of the government’s avowed aim of fighting black money, as it makes cash hoarding easier.
The introduction of the Rs 200 note seems to be another knell in the note’s coffin.
While it was launched amid impressed speculations about its impressive security features (GPS chip, radioactive colour, remember?), the note turned out to be disappointingly ordinary, and pretty much impossible to use. Since then, the only people with anything good to say about it have been those who really like the colour pink.
The note has faced speculation about its impending demise before this, and survived. Our government follows naught, but its own counsel, and may choose to retain it no matter how many and how loud the complaints are. Take note.