Is the Rs 2000 note on its way out or not? All you need to know (and a little more)
The Rs 2000 currency note is a bit like Taimur Ali Khan. Pink, pretty and always in the news.
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The Rs 2000 currency note is a bit like Taimur Ali Khan. It was born in 2016, is wonderfully pink and is constantly in the news.
Like the Khan baby, its popularity has seen wild swings, albeit in different trajectories —Taimur was literally born into a storm, with people with zero stakes in his life outraging over his name. Since that rough phase, he has grown to be a nation’s awwdoration.
The birth of the Rs 2000 note, in contrast, was hailed by many like that of a messiah born, with several superpowers (a GPS chip, radioactivity) ascribed to it.
Pink and power-packed: The note has never had a dull day in its short life. (Photo: Reuters/file)
Since then, however, its popularity has dipped, primarily because although pretty, it’s pretty much useless for everyday transactions.
Over the past two days, we have heard reports — yet again — that the note may be on its way out. The government — yet again — has said it's not exiting. Data — yet again — suggests its printing is definitely being scaled down.
Printing of notes is planned as per the projected requirement. We have more than adequate notes of Rs 2000 in the system with over 35% of notes by value in circulation being of Rs 2000. There has been no decision regarding 2000 rupee note production recently.— Subhash Chandra Garg (@SecretaryDEA) January 4, 2019
What, and why, is the mystery here?
Let’s look at the information at hand (even if the Rs 2000 notes aren't).
At the end of March 2017, 3,285 million pieces of Rs 2000 notes were in circulation, according to RBI data. One year later, in March 2018, 3,363 million pieces were in circulation. They amounted for 37.3% of the total value of the currency in circulation, down from 50.2% at the end of March 2017.
This means that while the number of notes in circulation was more — even if marginally — they made up a smaller share of the total currency in circulation, pointing to the fact that notes of other denominations were printed at a much faster rate.
Also, in response to an RTI query in November 2018, the Currency Note Press in Nashik said that it had not received any order to print Rs 2000 notes.
Thus, the printing of the Rs 2000 note is clearly being slowed down — why, then, is the government keeping such mystery alive over it?
When the note dawned pink upon us during the grey days of demonetisation, some learned people were already claiming it was a 'temporary measure', to replenish an economy left gasping by around 86% of its currency being scrapped.
To compensate for its obvious unease of business, we were told the note would be the definitive surgical strike on black money, a GPS chip/radioactive coat making it easy to trace. People soon realised that not only did the note have no such fancy features, even its colour was bleeding. We were then told that, in fact, was its security feature, and the notes that didn’t bleed were fake.
Checking if the notes bled was temporarily a national pastime. (Photo: YouTube/screengrab)
While this was all very interesting and intriguing, the notes were still darned inconvenient to use.
More worryingly, they were very convenient to hoard black money — cracking down on which had been one of the avowed aims of demonetisation.
Then, there was also the minor fact that their original design meant lakhs of ATMs had to be recalibrated in order to dispense them.
A report in August last year claimed that the SBI was yet to recalibrate 18,135 of its ATMs.
Scrapping the note, thus, makes a lot of sense — the Rs 500 and Rs 200 notes are keeping the flow of money going, the Rs 2000 note is anyway difficult to use, and it's reportedly helping black money hoarders.
Why is the government so insistent it will stick with the note?
Here’s a possibility — with the 2019 General Elections coming closer, cash will be put to all kinds of use, not many of them above board. The hoarding for this must already have begun. Is that, then, the planned masterstroke? Keep the mystery alive for now, and just before the elections, withdraw the notes, pulling the rug from under other political parties' feet — and their money chests?
Want to bet on it? Only in notes of Rs 2000.