On this date, that is November 8th in the year 2016, PM Modi led BJP Govt. created ripples across India, by demonetising Rs 500 and Rs 1000 currency notes.
Entire nation was shocked, and in chaos, as we witnessed long queues infront of the ATMs, and bank branches for taking currency notes.
Now, this is 2019, and after three years, an ex- Govt bureaucrat has suggested that Rs 2000 currency notes can be demonetised, without causing much disruption.\
What is the logic behind his claim?
Rs 2000 Currency Notes Can Be Demonetised?
Former finance secretary Subhash Chandra Garg, who was shunted out of Finance Ministry, has written a 72 page note on the currency economic policies, and demonetisation of currency notes.
In his notes, he has claimed that Govt can easily demonetise Rs 2000 currency note right now, and if Govt. does this, it won’t have a large scale impact to the scale of what was witnessed in 2016.
Demonetisation of Rs 2000 currency note won’t have any impact, because, as per Garg, majority of the currency has been ‘hoarded’.
He said, “A good chunk of Rs. 2000 notes are actually not in circulation, having been hoarded. Rs 2000 note, therefore, is not presently working as a currency of transaction. It can be demonetised, without causing any disruption.”
He also criticised Modi Govt for its economic policies, as he claimed that India’s fiscal management system “uses practices that are not sound and stable and runs levels of deficits and debt which are high and unsustainable”.
As per official records, he took a voluntary retirement on Oct 31st.
Why Demonetisation Of Rs 2000 Note Wont Have Any Impact?
Last month, we shared two critical reasons why RBI has stopped printing Rs 2000 currency notes.
The first and most important reason is counterfeit or fake currency.
As per some reports, more than Rs 50 crore worth of fake Rs 2000 currency notes have been seized in the last three years, which is way more than any such incident of fake currencies.
Now, if Rs 2000 currency notes are indeed banned, then it will have very less effect on the general public.
And the second reason is that such a large denomination of currency actually helps circulation of black money.
Rumors are that Govt can make a big announcement regarding currency notes today.
We will keep you updated, as more details come in.
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