Tue. Jun 25th, 2024
Rs 2000 notesSource: NDTV

In November 2018, the amount of Rs 2,000 currency notes in circulation fell to 223.3 crore pieces, or 1.75 percent of total notes in circulation (NIC), from 336.3 crore pieces in March 2018.

Printing of banknotes of a particular denomination is decided by the government after consulting with the Reserve Bank to keep the desired denomination mix intact for facilitating transactional demand of the public, said Pankaj Chaudhary, Minister of State in the Finance Ministry, in a written reply in the Rajya Sabha.

“As against 3,363 million pieces (mpcs) of Rs 2,000 denomination banknotes in circulation on March 31, 2018, constituting 3.27 percent and 37.26 percent of NIC in terms of volume and value respectively; 2,233 mpcs were in circulation on November 26, 2021, constituting 1.75 percent and 15.11 percent of NIC in terms of volume and value, respectively,” he said.

From 2018-19 onwards, no new indent has been set with currency production presses for the notes, according to Chaudhary.

”The decrease in circulation of Rs 2,000 note issued after demonetisation is because no fresh indent has been placed for the printing of these notes from 2018-19 onwards. Further, notes also go out of circulation as they get soiled/mutilated,” he said.

On November 8, 2016,  the government took the step to demonetise the then prevailing Rs 500 and Rs 1,000 banknotes for various reasons, including curbing black money. A new Rs 200, Rs 500 and Rs 2000 notes were introduced. 

In another reply, the minister said demand for a particular currency depends on various macro-economic factors, including economic growth and level of interest rate.

Currency demand is further influenced by precautionary demand produced by the public during fiscal 2020-21 as a result of the Covid-19 pandemic-related worries.

“Combination of greater public demand for cash and a contraction in GDP has led to an increase in Currency in Circulation (CiC) as a percentage of GDP from 12 percent during 2019-20 to 14.5 percent during 2020-21,” Chaudhary said.

However, year-on-year growth in CiC has slowed dramatically, falling to 7.9% in November 2021 from a pandemic-driven peak of 22.2 percent a year earlier, he noted.

By Harshita Sharma

I bring to you updates from business, policy and economy spectrum.

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