Six years since demonetisation, RBI withdraws Rs 2,000 currency notes: A look back at significant incidents | India News
A little more than six years ago, on November 8, 2016, the Indian government had introduced the new Rs 2,000 currency notes following the demonetisation of the old Rs 500 and Rs 1,000 banknotes as a step against accumulation and circulation of black money in the country.
Now, the Reserve Bank of India (RBI) has again decided to scrap a certain denomination of our currency. On Friday, the RBI decided to withdraw Rs 2,000 banknotes from circulation and asked everyone to exchange them by September 30, 2023. The RBI explained its move, saying that the aim of introducing the Rs 2,000 currency notes has been achieved as “it was introduced in November 2016 primarily with the objective to meet the currency requirement of the economy in an expeditious manner.”
Six years on, we take a look at the happenings around the country surrounding the Rs 2,000 notes since it was introduced:
While many pegged demonetisation as a “bold” move, the Opposition, over the years, have continued to criticise the BJP government over it. The past six years have witnessed protests by leaders of the Opposition parties against the “harm” the move caused to the country’s economy and its people.
While the circulation of new Rs 2,000 and Rs 500 notes was reportedly slow, about 115 people reportedly died while standing in queues to withdraw money from their bank accounts. Several businesses faced a crisis, following the government’s announcement, which roiled the economy as the GDP growth, too, declined to close to 1.5 per cent.
A panoramic view of queue outside ATMs in Sector 17 of Chandigarh in, December 2016. (Express Photo)
2016: From a move that was aimed at breaking “the grip of corruption and black money” in the country to pushing India towards a “cashless economy,” — these were the reasons put forth by the Central government after PM Modi announced the demonetisation move. The then RBI governor had also urged people to start using cash substitutes like debit cards and digital wallets, saying it would help India “leapfrog into a less cash-use economy at par with more developed nations.”
The Finance Minister, moreover, said the “seven-decade old normal” that existed in society had been “disrupted” — which was needed for the country to move towards a “new normal”.
2017: On the first anniversary of demonetisation, which resulted in long queues and economic hardships in the country, the NCP and Congress held protests across different states against the BJP-led Union government, marking November 8 as the “Black Day.” From organising candle marches, street play, to public fury (Janakrosh) march, the Opposition leaders in cities, including Kolkata, Ahmedabad, Vadodara, Pune, and Mumbai, registered their protest against the ban.
Indian Youth congress workers staged a protest march on the 2nd anniversary of demonetisation outside RBI Headquarters in New Delhi on Nov 9, 2018. (Express Photo by Amit Mehra)
Claiming that the decision to introduce demonetisation had curbed black money transactions, the BJP, as a counter to those protests, led a signature campaign, appealing the citizens to sign on it to express their support for the move.
The currency, which stood at Rs 17.97 lakh crore on November 4, 2016, declined to Rs 7.8 lakh crore in January 2017 soon after demonetisation.
2018: Congress took charge of criticising the note-ban exercise, and held a protest against demonetisation at the Reserve Bank of India (RBI) headquarters, along with its frontal organisations, in New Delhi. Opposition leaders and bodies attacked PM Modi-led NDA government for “ruining” and “wrecking” the country’s economy. The party also planned to seek an apology from the PM for the move.
Leading the attack, former Prime Minister Manmohan Singh described the sudden step as an “ill-fated and ill-thought” exercise. In a statement, he said, “the “havoc” unleashed by “notebandi” on the economy and society “impacted every single person, regardless of age, gender, religion, occupation or creed.”
Trinamool Congress (TMC) chief and West Bengal Chief Minister Mamata Banerjee, Delhi Chief Minister Arvind Kejriwal also regarded the step as causing “harm” to the country’s informal economy. Moreover, Rahul Gandhi referred to demonetisation to be “unique in the history of our tragedies because it was a self-inflicted, suicidal attack that destroyed millions of lives and ruined thousands of India’s small businesses”.
A group of social activists take out a march and protest against demonetisation after one year completion of demonetisation in Allahabad. (Express Photo)
2019: The year saw agitations by the Gujarat Pradesh Congress Committee at taluka, district and state levels across Gujarat from November 8 to 15 against BJP, economic slowdown, unemployment, and banking sector crisis around the country.
2020: Union Finance Minister Nirmala Sitharaman hailed the move as a “major push to digital economy”. The Covid-19 pandemic during the years — 2020 and 2021 — impacted the cash flow within the country. The cash in system recorded a steady increase in the year 2020. As of October 8, 2021, currency with the public stood at Rs 28.30 lakh crore. Moreover, as The Indian Express reported, currency in circulation (CIC) increased to a high of 14.4 per cent of GDP in 2020-21, a jump from 10.7 per cent of GDP in 2017-18.
Although the PM claimed that the move “helped reduce black money, increase tax compliance and formalization, and given a boost to transparency,” the Opposition Congress claimed that the move resulted in the GDP growth rate decreasing by 2.2% and employment falling by 3%.
2021: Five years after demonetisation, Congress leader Priyanka Gandhi asked: “If demonetisation was successful, then why hasn’t corruption ended? Why didn’t the black money come back? Why hasn’t the economy gone cashless? Why didn’t terrorism hurt? Why is inflation not controlled?”
Kolkata Youth Congress Loksabha Committee organised a demonstration by putting Oxygen Mask to protest against demonstration. (Express Photo by Partha Paul) Committee organised a demonstration *** Local Caption *** On completion of one year of Demonetisation South Kolkata Youth Congress Loksabha Committee organised a demonstration by putting Oxygen Mask to protest against demonstration on Wednesday. Express Photo by Partha Paul. 08.11.2017.
2022: Cash with the public recorded a new high of Rs 30.88 lakh crore at the fortnight ended October 21, 2022, The Indian Express reported, leading the Opposition parties to question BJP’s projection of it as a battle against black money and move towards a “cashless society”. Congress president claimed that “it destroyed businesses and ruined jobs.” Telangana IT Minister and working president of the TRS K T Rama Rao, called it a “colossal failure.”
The report asserted that cash remained the most preferred mode of payment in the country, despite claims by RBI and government bodies’ push for a “less cash society.”
BJP’s IT in-charge Amit Malviya countered the claims made by Kharge and said, “It would be better to go through the article first and understand context… the rise in currency in circulation in absolute numbers is not the reflection of reality.What needs to be taken into account is the currency to GDP ratio, which had come down after demonetisation.”
