Current affairs

Why PM Modi wasn't favour of introducing Rs 2,000 notes? His former secretary spills the beans!

By alagu, 23 May, 2023
Narendra Modi, 2000rupeenote, RBI, Demonetization

As the Reserve Bank of India's (RBI) latest decision to withdraw Rs 2,000 bank notes has been spelled as the another episode of demonetisation and has sparked a major outcry across the country, former principal secretary to Prime Minister Narendra Modi has spilled the beans that Modi wasn't favour of introducing Rs 2,000 bank notes after he carried out an unprecedented demonetisation in 2016 during which the legal tenders of Rs 500 and 1000 bank notes were revoked. 

Prime Minister Modi has been the centre of the criticism from the opposition parties for the withdrawal of Rs 2,000 notes from the market. As the RBI has announced that the people can exchange or deposit Rs 2,000 bank notes from Tuesday - May 23 till September 30, 2023, Narendra Modi's former principal secretary Nripendra Mishra has revealed that Narendra Modi has never considered Rs 2000 note as a note of the poor. 

Speaking to ANI, Mishra said, "PM Modi was not at all favour of Rs 2,000 notes. But, as demonetisation was to be done in a limited time, he gave reluctant permission for it." On the front of why he wasn't favour of that, Mishra said, "PM never considered Rs 2000 note as note of the poor, he knew Rs 2000 has hoarding value instead of transactional value." Mishra also cited that PM Modi believed that Rs 2,000 was unsuitable for daily transactions and that it would also promote tax evasion and black money.

Backing the RBI's move of withdrawing Rs 2,000 bank notes from the market, several BJP Ministers echoed Mishra's notion, saying that the withdrawal of the highest denomination will give a significant push to digital payment, curb black money, and mitigate tax evasion. The Rs 2000 denomination bank note was introduced in November 2016 and the printing of Rs 2000 notes was stopped in 2018-19. 

The total value of Rs 2000 bank notes was at Rs 6.73 lakh crore on March 31, 2018 and the value had sharply declined and on March 31, 2023, it stood at Rs 3.62 lakh crore. On May 19, the RBI said that it will withdraw all the Rs 2,000 banknotes as a part of its clean note policy, though it will continue to be a legal tender. 

While speaking to the reporters on Monday - May 22, RBI Governor Shaktikanta Das said that most of the Rs 2,000 note will be back to the banks by September 30, 2023, and he also urged the people not to rush to the banks to deposit or exchange the notes. By citing that there is enough time to exchange the notes, Das instructed the commercial centres and shops should accept these notes from the customers. 

He further said, "From time to time, RBI withdraws notes of a particular series and issues fresh notes. We are withdrawing the Rs 2000 notes from circulation but they continue as legal tender."  He also instructed the banks to not issue soiled or torn notes to customers and has also asked the banks to make necessary arrangements like installing shades from Sun and water facilities at banks for customers. 

On responding to a question why the Rs 2,000 banknotes were withdrawn, Das said that the notes have completed their life cycle. He said that the Rs 2,000 notes were primarily issued to replenish the currency after the 2016 demonetisation when Rs 500 and Rs 1000 notes were withdrawn as legal tenders. By citing that the Rs 2,000 notes were printed four to five years back, he stated that the printing of these notes has been stopped and that there are enough notes of other denominations at present. 

 

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