The Central Government has made it clear that high-value notes are still in circulation despite calls for their prohibition. Sushil Kumar Modi, a member of the BJP’s Rajya Sabha, has asked the Government in Parliament to phase out Rs 2000 denomination notes gradually.
Modi informed the news agency ANI that there was information that people had hoarded Rs 2000 notes and were using them for “terror funding, drug trafficking, and stockpiling black money” after bringing up the subject during Zero Hour in the Rajya Sabha.
Modi stated that the Central Government should consider phasing out the use of Rs 2000 notes so that people have time to replace them with other small denominations, citing developed economies like the US, China, and Germany as examples. These countries do not have currency notes above the denomination of $100.
The Central Government responded to a question in the Lok Sabha on Monday, December 12, by stating that no new Rs 2000 notes had been issued from 2018–19. From 22.65% in 2020 to 13.8% by March 2022, the proportion of banknotes in circulation with a face value of Rs 2000 has decreased. Between 2020 and 2022, the percentage of Rs. 500 notes climbed to 73.3% from 29.7%.
In order to maintain the desired denomination mix for supporting the transactional need of the public, the Government of India, in conjunction with the Reserve Bank of India (RBI), decides to print banknotes of a certain denomination. For the printing of notes with a denomination of 2000 starting in 2018–19, no new indent has been set with the presses. Additionally, as banknotes become soiled or damaged, they are taken out of circulation, according to Union Minister of State for Finance Pankaj Choudhary.
“On March 31, 2020, the value of banknotes in the denomination of 2000 as a percentage of all Notes in Circulation (NIC) was 22.6%. As of 31.03.2022, 13.8% of the total NIC’s value was made up of banknotes with a value of 2000 rupees. As of 31.03.2022, 73.3% of all NIC’s value is made up of notes with a value of 500 rupees, up from 29.7% on that date in 2000. Currency demand is influenced by a number of macroeconomic variables, including economic growth and interest rate level. The growth of digital transactions has an impact on the demand for currency, he continued.
The Minister added that as of March 31, 2022, there were 21,420 lakh pieces of Rs 2000 notes in circulation, according to data from the RBI.
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