Catching politicos off guard!
Modi Government after coming into power, took bold step of demonetization and later Rs. 2000 notes were introduced.
Hyderabad: The withdrawal of Rs 2000-denomination notes is not a sudden decision. One may recall that when in November 2016 the NDA government withdrew Rs 500 and Rs 1000 banknotes in circulation at that time and introduced Rs 2000 notes, it was said that it would have a lifespan of 4-5 years. Rs 2000 notes were issued prior to March 2017.
The RBI said in its statement that "The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore at its peak as on March 31, 2018 (37.3 percent of notes in circulation) to Rs 3.62 lakh crore constituting only 10.8 percent of notes in circulation on March 31, 2023."
Unlike in case of notorious demonetisation, Rs 2000 notes have not been withdrawn with immediate effect. All those who have Rs 2000 notes can now deposit them in banks with a limit of up to Rs 20,000 per day till September 30. It means that the data of who has how much quantity of Rs 2000 notes stocked with them would be available for the government.
It could help in tackling black money and may cause problems for the political parties which resort to distribution of money for votes as part of Centre’s clean note policy. However, it might adversely impact the political parties which are known to distribute crisp notes of Rs 2000 for the sake of votes.
There have been several recommendations from various quarters including some political parties like TDP which urged the Prime Minister to withdraw Rs 2000 notes. TDP chief N Chandrababu Naidu had given a written representation to the Prime Minister urging him to withdraw Rs 2000 notes.
The Union government has now observed that this denomination is not commonly used for transactions. These notes are mostly either with big industrialists or political parties. It also observed that the banks now have enough stock of notes of other denominations to meet currency requirements of the public.
In fact, from 2018, it has stopped printing these notes. They were not even being dispensed by ATMs for the past couple of months.
In view of the above, and in pursuance of the “Clean Note Policy” of the Reserve Bank of India, it has been decided to withdraw the Rs 2000 denomination banknotes from circulation.