The Rs 2,000 note has been the main denomination for hoarding of unaccounted income and assets, The Hindu reported on Tuesday referring to a reply by Finance Minister Nirmala Sitharaman in the Rajya Sabha.
Sitharaman told the Rajya Sabha on Tuesday that an analysis of the search cases involving cash seizures of more than Rs 5 crore revealed that 67.91% of the cash was in the form of Rs 2,000 notes in 2017-’18, 65.93% in 2018-’19, and 43.22% in the 2019-’20 financial years. However, the data also implies that the percentage of Rs 2,000 notes found by the Income Tax Department in cash seizures has been on the decline.
As of March 31, 2019, 329.1 crore pieces of ₹2,000 currency note were in circulation with a value of Rs 6.582 lakh crore. The Rs 2,000 note was introduced in November 2016, after the government demonetised old Rs 500 notes and Rs 1,000 notes. The government had defended the move to introduce the Rs 2,000 note, claiming it was meant for bigger transactions.
Former Economic Affairs Secretary SC Garg had on November 8, the third anniversary of demonetisation, said that the Rs 2,000 note should be withdrawn from circulation. “A good chunk of ₹2,000 notes are actually not in circulation, having been hoarded,” he said. “Therefore, ₹2,000 note, is not presently working as a currency of transaction.”
Last month, The New Indian Express reported that the Reserve Bank of India has not printed a single Rs 2,000 note this financial year, citing a Right to Information response. “The printing of 2,000 rupee notes has been substantially reduced,” an unidentified RBI official had said earlier this year. “It has been decided to limit the printing of 2,000 currency notes to minimum. This is nothing new.”
The move to print fewer Rs 2,000 notes is seen as an attempt to prevent hoarding of the high-value currency and to curb black money. The RBI’s response to the RTI query came at a time when the National Investigation Agency said that “high quality” counterfeit currency notes have resurfaced, and accused Pakistan of printing them.