2000 Rupee Currency Note: The decision of the Reserve Bank of India (RBI) to withdraw the two thousand rupee note is the right step by the country’s former economic advisor Dr. Krishnamurthy Subramanian. Subramanian, who was the Economic Advisor from 2018 to 2021, said that the use of 2000 notes had reduced and it was being used mainly for deposits. He has given 6 reasons in support of this decision.
RBI had announced to withdraw 2000 rupee notes from circulation on Friday (May 19). After this decision, the opposition parties have attacked the Modi government. 2000 notes were issued in November 2016 after the old notes of 500 and 1000 were discontinued. Now after about seven years, they have been withdrawn. Former Economic Advisor has given this reason in support of returning the notes.
Why it is important to demonetise 2000 notes?
1- 2000 notes were found during the raid at many places. This proves that the currency was being used mainly for hoarding money. He said that 80 percent of the people who have legally kept this currency, only 20 percent are deposited with them. Whereas, 20 percent of hoarders are likely to have 80 percent of the 2000 notes deposited.
2- This step will not cause inconvenience to the common people, as large numbers of Rs 2,000 notes are not being used for economic transactions.
3- The role of notes as physical currency, especially the 2000 note, has declined as a large number of people are making digital payments.
4- Rs 500 note (with digital money) can be used as a medium of exchange in place of Rs 2000 note.
5- Digital transactions are expected to grow 3 times from now to 2026 (BCG report), which will further reduce the need for Rs 2000 notes as a medium of exchange in the years to come.
6- Krishnamurthy said that the most important thing is that the RBI has said that the 2000 note will remain legal tender. In such a situation, those who have 2000 note can exchange it. He also said that according to his understanding this date can be extended. However, this will require an order from the RBI.
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