Over 43% Unaccounted Cash Is In Rs 2,000 Notes. Did Demonetisation Really Serve Its Purpose?
Nirmala Sitharaman in a written reply to the Rajya Sabha said that 43.22 per cent of unaccounted cash seized in the current fiscal year so far is in the form of Rs 2,000 notes.
Sometimes things are just out there in the open and everybody can see it. All you need to do is join the dots and reach a logical conclusion on the shreds of evidence. The much-hyped sudden decision of Prime Minister Narendra Modi to demonetise high-value currency notes in November 2016 is one such.
In the days, weeks and months that followed the November 8 decision announced by the PM, and even without the knowledge of key members of the government, the nation came to a standstill as cash crunch persisted and ATMs ran dry. Reports of problems in marriages and health-related check-ups and other issues surfaced soon. Several people also reportedly lost their lives in the events that followed.
Representational Image. BCCL
However, many looked to the bright side and pointed out what the government claimed. That demonetisation would end fake currency and hoarding of cash and make the system more transparent. But economists did not seem to agree.
They contested the claims saying that the introduction of Rs 2000 notes will only worsen the situation and make hoarding of cash more easier for miscreants and anti-social elements.
Three years down the line and we see the Indian banking system as well as the economy in the midst of a slowdown and an impending crisis. Reports of banks being duped of thousands of crores and fake currency being seized in high volumes keep surfacing every now and then. To sum up the current crisis, hoarding of huge volumes of cash is prevalent in India right now and authorities are struggling to curb it.
REPRESENTATIONAL IMAGE. BCCL
But guess what? The Rs 2000 notes, which were released by the Reserve Bank of India (RBI) after the November 2016 demonetisation of Rs 500 and Rs 1000 banknotes, is now the favourite currency for hoarders.
The information was shared by Finance Minister Nirmala Sitharaman in a written reply to the Rajya Sabha. She said that 43.22 per cent of unaccounted cash seized in the current fiscal year so far is in the form of Rs 2,000 notes.
In the first full financial year after demonetisation (FY18), 67.91 per cent of unaccounted cash was made up of Rs 2000 notes. It was a bit lower at 65.93 per cent in FY19 and has come further down this fiscal. But this doesn¡¯t disregard the fact that almost half of the cash is still being hoarded in Rs 2,000 notes whereas the purpose of demonetisation, which led to its introduction, was putting an end to money laundering and counterfeiting in the first instance.
REPRESENTATIONAL IMAGE. BCCL
The revelation comes after the Reserve Bank of India has admitted that it has stopped printing Rs 2,000 currency notes. The Bharatiya Reserve Bank Note Mudran has not printed a single Rs 2,000 note this financial year while 3,542.991 million notes of Rs 2,000 were printed during the 2016-¡¯17 financial year, the RBI had earlier said.
The move to print fewer Rs 2,000 notes is seen as an attempt to prevent hoarding of the high-value currency and curb black money. The Union government had informed the Lok Sabha earlier this year that over Rs 50 crore in fake currency notes have been seized in the past three years. Further, according to the annual report of RBI, there has been a significant increase in fake Rs 2,000 currency notes in the 2017-¡¯18 financial year.
RBI said 17,929 fake Rs 2,000 notes were detected in 2017-¡¯18 while only 638 fake notes of the same denomination had been detected the year before.
More instances of fake Rs 2,000 notes being caught:
Karnataka: Police seized fake Indian currency notes with the face value of Rs 7 crore in Belagavi; One person arrested, case registered pic.twitter.com/chSueohEjr
¡ª ANI (@ANI) April 18, 2018
#WestBengal: Murshidabad police busted a gang dealing in fake currency and recovered FICN worth Rs 5,96,000 in Rs 2000 notes, three arrested pic.twitter.com/NEicZLUcZ5
¡ª ANI (@ANI) November 18, 2017
Nepal: Kingpin of Fake Indian Currency Notes (FICN) Yunus Ansari & 5 others, including 3 Pak nationals, have been sent to jail by Kathmandu Dist Court. They were arrested on 24 May from Tribhuvan Int'l Airport in Kathmandu, FICN with face value of Rs 7.67 Crore were recovered. pic.twitter.com/barB7Wyrhb
¡ª ANI (@ANI) July 30, 2019
West Bengal: Border Security Force (BSF) apprehended two persons with Fake Indian Currency Notes (FICN) from Malda's Gulapgunj market, recovered 325 notes with face value of Rs 6,50,000 in Rs 2,000 denomination notes pic.twitter.com/Dx9NtcOobz
¡ª ANI (@ANI) December 31, 2017
Coimbatore: Police seized huge quantity of fake Indian currency notes of Rs 2000 denomination; Printing machine, laptop, in and white paper also seized, one person arrested pic.twitter.com/048goMjG02
¡ª ANI (@ANI) June 2, 2018
Chandigarh: One arrested by Haryana Police in possession of Fake Indian Currency Note (FICN) with the face value of Rs 24.60 lakh, on August 30. Accused identified as Rohit alias Raman, a resident of Haryana's Hisar. Case registered. Investigation underway pic.twitter.com/DXEglmCIdN
¡ª ANI (@ANI) August 30, 2019
Nepal Police arrested 4 Pakistanis and 2 Nepalis in possession of Fake Indian Currency Notes (FICN) at Tribhuvan International Airport in Kathmandu earlier today. pic.twitter.com/fLNTkZyaXJ
¡ª ANI (@ANI) May 24, 2019
The new entrant in Indian monetary system has courted much controversy over the past three years. Now after this public acknowledgment that Rs 2000 notes are being hoarded and RBI having already stopped fresh printing, many are also of the view that these notes may be demonetised again. There is, however, no official confirmation on this front.