President & Group Managing Director: Dr.Shelly Ahmed | Editor in Chief & Group CEO: M H Ahssan

Tuesday, March 28, 2017

Is it time to say goodbye to Rs 2,000 note?

It's up to none other than Prime Minister Modi to decide.

It seems the government is fed up of the “pink note” exactly as Indians are warming up to its shocking pinkness. According to a report in The Statesman, “The central government is preparing to gradually phase out the new Rs 2,000 note. The government is also preparing to bring in laws to take penal action against hoarders of the new Rs 2,000 note, according to people in the know of the development.” 

The report further adds: “The idea behind introduction of the high denomination Rs 2,000 currency was to quickly remonetise the economy with the value in circulation. There is a strong push for a clean economy, towards less-cash economy and putting an end to the parallel black economy.”
Even in his latest Mann Ki Baat, aired on March 26, PM Modi batted for digital payments and the cashless push, in his bid to sway the people of India to fight corruption and black money. On December 25, 2016, PM Modi had asked his fellow Indians to be “at the forefront of using digital means to make payments and transactions”.
At the India Today conclave, RSS ideologue S Gurumurthy had told India Today TV’s managing editor Rahul Kanwal that eventually Rs 2,000 notes would be taken out of circulation because it was a stopgap measure to quickly remonetise India.
The November 8, 2016 decision by PM Modi had resulted in 86 per cent of liquid currency in cash being sucked out of the system, and soon, the new Rs 500 and Rs 2,000 notes were introduced.
With the Finance Bill, 2017 empowering income-tax officials to raid and seize any property, and cash holdings, if they have “reason to believe” and which they do not have to disclose to the person/s raided – the “assesse”, the focus is once again on the high denomination note that is Rs 2,000.
Concerns have been raised that Rs 2,000 could contribute to black market of illegal cash, as it’s easy to change hands, leading to increase in illegal dealings. As it is, fake Rs 2,000 notes have become a modern day menace, with outrageous words, such as “Bharatiya Manoranjan Bank” written on notes dispensed by proper ATMs in Delhi and other cities.
Even though the Finance Bill, 2017 has set an upper limit of Rs 2 lakh in cash transaction per person per event per day, Rs 2,000 could significantly hinder the objective thus proposed by the government. While the GST is supposed to bring in more transparency from July 1, 2017, what if the ultimate aim of clean money isn’t met because of the pink note in our midst?
What’s doing the rounds as rumours in the corridors of power – still hard to tell if it’s intentional leak meant to deflect from the game plan, or something like testing waters – no confirmation has yet come out from official channels.
As of now, the fate of the pink note is very much in PM Modi’s hands.
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