A year after demonetisation, we don’t get to see too many of those Rs 2000 pink notes, do we? So there are two possibilities: either the Reserved Bank of India (RBI) is back-printing these pink bills or it could have stopped printing of these highest denomination Indian currency.
A State Bank of India report, written by SBI chief economist Soumya Kanti Ghosh cited the annual report provided by the RBI to Lok Sabha. As per this report, the value of Rs2000 notes was Rs7,308 billion as on December 8, while RBI has printed 3,654 million pieces of Rs2,000 notes as till December 8. This implies that the total value of pink bills was equivalent to Rs13,324 billion as on December 8 after we net out the small denomination notes from the currency in circulation on December 8. This means that the residual amount of high-value currency notes of Rs2,463 billion may have been printed by the RBI but not supplied in the market.
So logically, the RBI is holding back Rs2,463 billion worth of Rs 2000 notes or have consciously stopped printing the 2,000 denomination notes/or printing in smaller numbers after initially it was printed in ample amount to normalise the liquidity situation. There could be a possibly that since making transactions using the pink notes is comparatively tough, and their circulation in market is sluggishly stagnant, the RBI might be controlling the number of Rs 2000 notes by holding them back.
But the catch here is that the report says ‘high-value’ currency notes, and high-value notes also include Rs 500 notes along with Rs 2000 notes. But since Rs 2000 notes have been the centre of speculation that indicates that RBI’s idea was to eventually phase out the pink bills. There is a logic behind his speculations too. The high-value bills were an easy tool for both the Government and the RBI to print and quickly infuse a large amount of cash into the system within minimum time. The quick infusion of cash was necessary because after demonetisation, 86% of the country’s hard cash was illegalised and it caused a severe cash-drought in the cash-dependent Indian economy; almost paralysing most of the small to medium scale transactions. In these times of urgency, it wasn’t feasible for the government to infuse huge amount of money with smaller notes. Hence, 2000 pink bills were a boon – possibly it was a temporary denomination; and the RBI might eventually kill the pink bills.
However, the government has no hurry to jab-kill the pink notes, rather, it can be done over a period of time so that people can be saved from the shock waves that they are scared of in the name of ‘demonetisation’. Since out Prime Minister is fondly fond of following global trends to catch up with the pace of already super-developed nation, despite the fact that in the race, we almost gasp out to death – the death of Rs 2000 seems to be certain. Slow, but certain. Because globally, at some point, developed economies have flushed out high-value denomination cash components to promote a transparent and cashless economy. And Indian government is desperate about that, so that explains all the speculation, despite being officially announced.