2000 notes: Why did they Disappear?
It seems that all the effort we put into standing in line to get hold of the Rs. 2000 notes has been wasted. In its Annual Report 2021, the Reserve Bank of India noted that no reminders of the highest denomination had been printed since 2019.
According to the RBI report dated March 2021, the circulation of Rs. 2000 notes had dropped dramatically to 17.3 % of overall notes in circulation. Reports indicate a new low circulation rate of 22.6% per cent in 2020, down from 37.3% in 2018.
RBI Annual Report 2020 says the number of Rs 2000 currency notes in circulation decreased from 33,632 lakh pieces to 32,910 lakh pieces a year ago, and then to 27,398 lakh pieces a year later.
The RBI reported that it had decided not to print the highest denominations of currency due to security concerns. The ease with which higher-value notes can be stored in the form of black money is one reason why notes are not being produced for 2021-22. This high denomination paper money was introduced with the backing of the Central Government, which claimed they would curb black money hoarding.
Secondly, people find it challenging to break extensive denomination notes into change, so they opt to use digital payments instead.
In 2019-20 and 2020-2021, 2000-rupee notes will not be sent to the printing press, according to Finance Minister Anurag Thakur.
What happened to the Rs 2000 notes?
The announcement of demonetisation resulted in everyone getting a brand new Rs 2000 currency note. However, all the hype surrounding the Rs 2000 note has disappeared over the past couple of years. According to some people, including TV news channels, an embedded chip in the Rs 2000 currency note detected its location and, therefore, unearthed hidden black money! The new Rs 2000 notes are also believed to become invalid one fine evening like the old Rs500 and Rs1,000 notes.
When was the last time you held an Rs 2000 note in your hand? Has it been a year, two years or longer?
Despite this, the Rs 2000 notes are becoming more and more challenging to locate. Their disappearance began with automated teller machines (ATMs) and then cash counters bank branches.
According to Lok sabha’s reply, despite RBI’s claims, the government and RBI did not order their money to be printed in the past two years.
The minister of state for finance, Anurag Thakur, told the house that the government and RBI determine the printing of banknotes of particular denominations to maintain the desired denomination mix to facilitate transactional demand from the public. It has not been linked with the presses for printing Rs 2000 banknotes during the years 2019-20 and 2020-21.”
A Ganeshamurthi, a member of Parliament (MP), has questioned why Rs 2000 notes cannot be found anywhere in banks or ATMs and why they seldom circulate. Also, he has asked the government if the printing of the Rs2,000 currency notes has been discontinued.
After demonetising old Rs500 and Rs1,000 notes in November 2016, the Modi government introduced the Rs2,000 note. At that time, more than 85% of the currency notes in circulation were eliminated by this move. Due to the ban on (old) Rs500 and Rs1,000 currency notes, the Rs 2000 note was initially circulated in large quantities to mitigate cash shortages.
According to the Reserve Bank of India, 3,362 million banknotes of Rs2,000 denomination were in circulation on 30 March 2018, representing 3.27% and 37.26% of the total number of currency notes in circulation (NIC) accordingly. The 26 February 2021 edition of the National Indicator of Currency (NIC) contained 2499 mpcs, representing 2.01% and 17.78% of NIC respectively.”
Therefore, the government has removed 863 million rupee banknotes of Rs 2000 denomination from circulation over the past three years. The RBI or currency note presses have not been ordered to print these notes.
The Print reported in January 2019 that India had ceased printing Rs 2000 notes, citing highly placed government sources, to reduce the circulation of the notes slowly.
In any case, the rupee notes will likely gradually be phased out as the circulation is reduced.
As reported in the report, “the Modi government became suspicious that the high denomination currency note is being used for money laundering, tax evasion and hoarding,” which prompted the decision to discontinue printing new Rs 2000 notes.
Part of the reason for the lower number of Rs 2000 notes in circulation is explained by the minister’s answer in Lok Sabha. The government has failed to explain why there will be fewer Rs 2000 notes in circulation or why no order for printing will be issued.
Indians still mourn the destruction of livelihoods and the damage caused to the integrity of the currency system by the demonetisation adventure of 2016.
Demonetisation continues to be a disaster 5 years after it began.
With demonetisation, the Narendra Modi government unleashed an unprecedented and self-inflicted disaster on hapless Indians five years ago. During the night of November 8, 2016, Modi imposed the Tuglaqian-adventure, unparalleled in global financial history, causing the economy to collapse and left millions in despair. Indians queued for months at banks and ATMs in a desperate attempt to withdraw money; many died from exhaustion due to their efforts.
Although the Modi regime has little to show for the massive exercise, India’s agonising experience is seared into its collective memory.
Overnight, 86% of the currency’s value in circulation evaporated with the demonetisation of the important denomination notes – Rs 500 and Rs 1,000. These notes were effectively rendered useless. Millions of Indians could not exchange the now worthless notes for new ones because the notes did not exist.
While this unprecedented move was initiated by a troika of the prime minister, finance minister, and RBI governor, whose job is to manage the national currency, none of the players had made any prior preparations.
Even five years later, cash plays an important role, especially in the informal economy that supports most Indians’ livelihoods.
While it was a stupid move to replace the 500-Rupee note with a new one, the move to abandon the 1,000-Rupee note in favour of a new 2,000-Rupee note was positively irresponsible, as the following events have underscored.
Despite the growth of digital payments, the cash-based economy remains as relevant today as before the deadly strike, and the Indian economy remains mired in a deep crisis.
The Modi Government engineered a series of disasters for its party at the expense of the most vulnerable members of the society, including demonetisation, GST implementation in a hurry in 2017 and 2020’s pandemic-related lockdown.
Remember this the next time you wonder where all the Rs. 2000 notes went because they haven’t been printed in quite a while. The pink notes won’t be around you for long if they keep disappearing at this rate.
edited and proofread by nikita sharma